While nonprofit organizations advocate for policy changes to address the global phenomenon of derisking, financial institutions are creating cutting-edge technologies to speed and improve their compliance with anti-money laundering regulations.
A new study from the Center for Global Development assesses six new technologies and their potential to solve the derisking problem. Fixing AML: Can Technology Help Address the De-Risking Dilemma? examines machine learning, biometrics, big data, know your customer (KYC) utilities, distributed ledger technology (DLT)/blockchain, and legal entity identifiers (LEI). Machine learning is a type of artificial intelligence that could cut down on false alerts and identify undetected illicit finance techniques. Biometrics are much more robust than passwords or tokens and generally easier to use. Big data refers to datasets that are high in volume, velocity and variety and their applications offer more scalable storage capacity and processing. They also allow different types of data to be stored in one place, so compliance staff spend less time gathering information from disparate sources. They can greatly expand the range and scope of information available for KYC and suspicious transaction investigations. (Read more)