Excel to AI: How Reconciliation Tools Evolve for Better
In the world of finance, reconciliation is the process of comparing two related sets of records or two accounts at the end of a specific accounting period to find out if account balances are matching in both records. Periodic reconciliation of accounts is an importan...
Typology Repository Management: Solving AML Problems Via Collective...
As money laundering techniques are growing in volume and complexity, banks can no longer sustain fighting financial crimes the conventional way by just focussing on rules-based, siloed detection with no or limited insights from peer banks. This paper begins with analysing the current state of the AML Transaction Monitoring (TM) ecosystem, highlighting the challenges across legacy systems and traditional machine learning applications. In the next segment, the paper highlights Tookitaki’s innovation in TM through Typology Repository Management (TRM), a new way of detecting money laundering through collective intelligence and continuous learning. At Tookitaki, we envision that this advanced machine learning approach will enable financial in...
OCC Spring Risk Perspective: 5 Takeaways on Compliance Risk
Despite its general strength, the US federal banking system is apparently susceptible to the ongoing economic weakness caused by the rampant spread of coronavirus. Earlier this month, The US Office of the Comptroller of the Currency (OCC) published its latest Semi-annual Risk Perspective explaining the key issues of the country’s banking system and the impact of the COVID-19 pandemic on the industry. The Spring report says banks “face weak economic conditions resulting from the economic shutdown”, leading to negative impacts on earnings, credit quality, operations, and capital. It added that record-high unemployment levels and business closings will adversely impact credit risk, while operational risk will be elevated as banks implement new processes and procedures, adapt business continuity plans and respond to pandemic-related fraud and cyber risk. The OCC also opined that compliance risk is increasing due to a number of reasons including changed operations, remote working, rapidly changing customer service environment, and new assistance programs for consumers and small businesses – such as the CARES Act and the Paycheck Protection Program (PPP). Here we are trying to present certain highlights related to compliance risk in the OCC report and suggest ways to overcome the challenges mentioned there. 1. New Government Relief Programs Adding to Existing Stress Stimulus measures such as the CARES Act and PPP have increased credit, operational, and co...
5 Top Myths and Facts about AI Implementation in AML Programs
We are more confirmed about the power of Artificial Intelligence (AI) to transform lives and businesses now. There are countless possible applications of AI and machine learning at present, and we see and hear exciting ways how these modern technologies are being used for value addition or for tasks deemed impossible with human intelligence. When we move to the anti-money laundering (AML) compliance space, the potential of AI is immense. Many banks have pilot projects ongoing with the multiple vendors after regulators including the US Financial Crime Enforcement Network (FinCEN) encouraged banks “to consider, evaluate, and, where appropriate, responsibly implement innovative approaches to meet their Bank Secrecy Act/anti-money laundering (BSA/AML) compliance obligations, in order to further strengthen the financial system against the illicit financial activity.” Increasing complexity of AML threats during the COVID-19 times, ever-increasing volumes of data to analyse, false alerts rising to unmanageable levels, ongoing reliance on manual processes and the ballooning cost of compliance are prompting many financial institutions to adopt modern technology and improve their risk profile. Many banks were able to develop scientifically sound machine learning algorithms that provide obvious effectiveness and efficiency improvements. However, most of these projects are finding it difficult to come out of the lab as deploying a machine learning model in production with real value addition is a harder task than what we expected. Many banks are stuck at the AI implementation stage w...
Exploring AML Risks in COVID-Era and the Ways to Address Them
The world continues to battle the COVID-19 pandemic and the crisis it brought in is unprecedented in the history of humankind. While there are a number of pandemic-related factors contributing to the expected crisis with financial services, financial crimes pose a serious threat to their business. As criminals are taking advantage of the outbreak of the COVID-19, financial institutions are trying to address the heightened risk of money laundering. However, they require smarter solutions with better data processing power and faster deployment options to keep up with the change required. Compliance failures, though expected during a crisis like this, can be curtailed to a great extent with the use of the right technology. Modern technology...
AML Amid COVID-19: Watch out for These FBI-listed Fraud Schemes
There has been a rise in the number of cybercrimes and fraud schemes across the globe ever since the proliferation of the COVID-19 pandemic. Criminals, in general, are taking advantage of people’s scare, helplessness, and the need for immediate financial assistance a...
