Financial crime and money laundering are among the world’s largest economic practices, accounting for about five percent of the global GDP. As countries manage their own laws and regulations, banks are often the first line of defence against this global threat. In this blog, we’ll explore how AI is revolutionizing the fight against money laundering and the role of NGA’s RiskSecure solution in enhancing compliance processes.
Financial Crime and the Need for Stronger Compliance
The Financial Intelligence Centre Act (FICA) of 2001 was a significant step in the fight against money laundering, giving banks the responsibility to ensure compliance. Banks must gather the required information and documentation before opening accounts, creating a massive administrative burden. However, the constant evolution of criminal behaviour means that traditional methods of compliance are often inadequate.
HLBNGA’s AI-Powered Solution: RiskSecure
To meet these challenges, NGA has developed RiskSecure, an artificial intelligence (AI) solution for risk-based anti-money laundering (AML). Kyle Stroombergen, Head of New Deliveries at NGA, notes that the company’s solution is smart enough to adapt to changing behaviours, offering a significant advancement over traditional methods. RiskSecure has an impressive track record, with zero incidences of non-compliance among its clients.
Key Features of RiskSecure
1. Real-Time Monitoring and Adverse Media Database
RiskSecure enhances traditional screening by providing real-time notifications about corruption allegations and adding context to politically exposed persons (PEP) and sanction lists. By compiling the world’s largest adverse media database, RiskSecure offers near-instant access to detailed risk reports.
2. Seamless Integration with Data Providers
NGA simplifies the process of checking FICA lists by using optical character recognition (OCR) technology. This allows the AI to scan and cross-reference PDFs from data providers with the customer database, streamlining compliance checks and improving efficiency.
3. AI-Driven Risk Assessment
RiskSecure’s AI engine, SocialListener, scans all media mentions and rates sentiment, providing detailed assessments with direct links to research citations. This eliminates the manual labor required for traditional name matching and allows for one-click risk assessments, making compliance faster and more efficient.
The Evolving Role of AI in Risk Management
Despite the fears that AI might replace human workers, Stroombergen emphasizes the importance of human intervention to apply policies and laws. AI enhances the work of human AML officers by automating repetitive tasks, such as data analysis and risk assessment, which frees up time for more strategic decision-making.
Machine Learning: Understanding Customer Behavior
As the banking experience shifts to a mobile-first model, customer behavior is evolving rapidly. Machine learning allows RiskSecure’s AI to cluster banking behaviors, establish norms, and detect anomalies. These anomalies are flagged for further review by AML officers, helping banks identify potential risks faster and more accurately.
A Solution Built on 20 Years of Data Science Experience
With over 20 years of data science experience, NGA has fine-tuned its models to ensure that RiskSecure meets the needs of its clients. Stroombergen notes that the company customizes the product for each client using the 80/20 rule, as its models are already well-established and only require minor adjustments based on each client’s internal processes.
Moving to the Cloud: Future Developments
NGA plans to move RiskSecure to a cloud-based system, further improving accessibility and efficiency. The cloud solution will integrate with various infrastructure providers, making it easier for clients to access a growing, categorized database for real-time reporting.
Conclusion
RiskSecure offers a powerful AI-driven approach to anti-money laundering that enhances traditional methods of compliance. By automating risk assessments and providing real-time, context-rich information, RiskSecure allows banks to stay ahead of evolving criminal activities and streamline their compliance processes. The solution reduces the administrative burden on AML officers, freeing them up to focus on more critical tasks, and enables banks to operate with greater speed and accuracy in the fight against financial crime.