Using Artificial Intelligence to Fight Financial Crimes
Amid an explosion of global financial data, combatting financial crimes and managing highly regulated transactions has become increasingly complicated.
Earlier this month, a panel at LegalWeek 2020 focused on these complexities, exploring anti-money laundering (AML) trends as well as the state of legal artificial intelligence (AI) solutions in AML compliance and screening. Joseph Raczynski, a legal technologist with the Thomson Reuters Legal business, recently highlighted the panel’s conversation in a Legal Executive Institute column.
Panelist Cassie Lentchner, partner at Pillsbury Winthrop Shaw Pittman, started by noting how those institutions considering or currently using AI for compliance functions must employ a risk management fundamentals model. She added that AI technology is not yet at the point of replacing institutional judgement and decision making.
Another panelist, Tim Mueller, partner in Global Investigations & Compliance at Guidehouse, noted that as more regulators weigh in on how compliance departments use AI, we are at a point where some of these algorithmic applications require financial institutions to get prior written approval from regulators.
Additional insights came from panelist Dr. Sam Small, chief security officer of ZeroFOX. He explained the ease with which social media can be co-opted through impersonation, account takeover, piracy, threats of violence and fraud – as well as ways AI tools can counter these forces.
Panelists agreed that the guiding principles of using proven, defendable technology, being transparent, and augmenting processes that are already in place need to gain acceptance from regulators, internal auditors and compliance department leadership. The panel’s conversation underscored how the rapidly changing landscape of financial data compels compliance organizations to adopt these tenants or incur risks for their company if they do not.