What is AI, and Why do We Need It?
AI (Artificial Intelligence) or Machine Intelligence is intelligence noted in machines. A computer or machine that has AI capabilities demonstrates cognitive abilities close to that of humans, and the advent of AI has changed our daily lives drastically.
Over time, sophisticated criminal groups have understood how to take advantage of legacy financial systems – the financial sector isn’t ready to combat that. According to IBM’s report on financial crime, the most common problems faced by employees during investigations are:
- Investigations take too long to complete
- Incompatible/Outmoded systems/tools
- A high number of false positives/unsubstantiated results
- Lack of data/insight around customers, accounts, and entities
- Too much information to sort through in the allotted time
- The increasing complexity of regulatory requirements
- Lack of skilled resources
- Management pressure to increase efficiency
Financial Crime and Artificial Intelligence
The increased use of cashless money and digital transactions has made fighting money laundering much more complicated. Nowadays, financial institutions are using all means necessary to protect their customers from financial crime, and machine learning seems to be helping.
According to the World Payments Report of 2017, non-cash transactions in Asia are expected to reach 277 Billion by 2020. PWC’s recent study on AI and financial crime informs us that the problem lies mainly with the mindsets of business leaders. Business leaders are either too confused to understand how AI can help, or they are thinking of solutions that are far too ahead of our time and aren’t practical.
The use of AI differs from user to user. Sometimes, AI is used as an enabler. The combination of AI and machine learning makes processes and operations much more efficient than they used to be. In other cases, AI is used as an exploratory process. This process helps businesses understand if they are missing something, or if there is a loophole in their current framework.
A future that has AI-driven compliance will have a massive impact on how our financial services operate. This will, in turn, increase automation, help prevent financial crime, and reduce the manual overheads used in businesses. The intelligence of AI also enables businesses to rethink the KYC (know your customer) process completely. Now, KYC is more of an “identity-matching” process rather than a conventional “name-matching process”.
Banking sector giants like HSBC and CitiBank have large volumes of data, mainly due to their nature of business. Because of artificial intelligence and machine learning, they train their systems to understand what a standard framework looks like, and that is when AI goes to work. Machine learning has the complex capability to learn from every transaction, and when it seems abnormal, the system can notify you to scrutinize the transaction.
With enough information, AI can perform sophisticated reporting that, in turn, re-imagines the way our decisions are made and the way we look at problems of the financial sector. Many financial institutions currently still run their processes on legacy reporting systems.
They have to comply with a lot of systems, specifically on complex cases that take a lot of human resources. The increased labor takes up increased costs. That’s why not only do legacy systems take up our time, but they also cost a lot of money.
APN Consulting is a premier staffing recruitment agency with over 16 years of experience working in the field. Contact us today to find candidates skilled in financial crime and with knowledge of AI. To get in touch with our expert team, you can contact us directly online or email us at firstname.lastname@example.org.