R&C: To what extent are compliance departments turning to new technologies to help manage financial crime risks? Compared to legacy compliance systems, what kind of opportunities does the latest financial technology offer financial institutions (FIs) in identifying and responding to suspicious activities?

LaScala: We have seen an increase in compliance departments leveraging new technologies to manage financial crime risks. Tools, such as machine learning (ML), artificial intelligence (AI) and robotic process automation can increase effectiveness and efficiency of anti-money laundering (AML) programmes. Specifically, they can help automate repetitive tasks and produce more valuable alerts so that compliance departments can better identify risk and spend more time investigating potentially suspicious activity.

R&C: How are regulatory authorities responding to FIs’ use of technology tools? What guidance are they providing on how FIs should deploy their compliance resources?

Mueller: The Financial Crimes Enforcement Network (FinCEN) and Federal Banking Agencies issued a Joint Statement in which they make clear that they welcome, among other methods, the use of AI or ML to enhance a bank’s capabilities to detect suspicious activity. Importantly, the Joint Statement notes that the deployment of innovative techniques in anti-money laundering (AML) compliance should be used to enhance a bank’s AML programme to better detect financial crime and not solely as a means to cut costs.

Oct-Dec 2019 Issue