AI Now Helps Banks Manage Compliance

Will artificial intelligence help banks navigate the complexities of compliance more effectively?

Against a backdrop where regulations have grown by leaps and bounds in the wake of the financial crisis, The Wall Street Journal reported that banks have taken on tens of thousands of new staffers tied exclusively to compliance.

But a little technology muscle may not hurt either.

WSJ noted that artificial intelligence is being deployed across a number of initiatives, which include anti-money laundering programs, sanctions lists and billing functions. The movement toward automation, of course, means that flesh-and-blood workers are free to take on other tasks.

The trend has some legs, as WSJ stated. A survey released in March of more than 420 senior financial firm executives, conducted by Baker McKenzie, found that nearly half of respondents expect to use AI in tandem with risk assessment over the next three years. The breakdown is such that 29 percent saw it being used in the future in know-your-customer initiatives and also money laundering oversight. Another 26 percent said that broader use would be apparent in regulatory oversight and compliance efforts.

In an interview, Mallinath Sengupta, CEO of NextAngles, which uses AI in conjunction with banks to help monitor compliance, stated: “Since 2008, they have been throwing people at the problem, but that is not sustainable. There are millions of transactions going through. Which ones are compliant? Which are not? If you have to figure that out on an individual basis, that’s an onerous task.”

False positives can be a task to wade through in monitoring anti-money laundering programs, with several hundred cases left on the table to be investigated, even as banks monitor hundreds of thousands of transactions worth at least $10,000 on a monthly basis. By way of contrast, AI can help identify which cases do indeed need additional consideration.