Money Laundering, Terrorist Financing and Financial Crime
Sunday, January 29, 2023
WILL COST-CUTTING BANKS THAT FAIL TO UPGRADE TO AI/ML-BASED AML/CFT PROGRAMS ENDANGER THEIR COMPLIANCE OFFICERS?
With the ever-expanding compliance costs plaguing most financial institutions, even to the extent that it diminishes shareholder profits, many banks look to cut costs wherever they can. This poses a problem for individuals in their compliance departments, as the use of artificial intelligence, with machine learning capability and advanced analytics, becomes so common that it is fast attaIning the status of being considered Banking Best Practices.
Here's why this is a problem; regulatory agencies and auditors will be looking to see that ai is present in compliance programs, and given the shift to indicting compliance officers who commit professional negligence in failing to catch major money laundering operations, at customs identification or transaction monitoring, can compliance officers risk serious individual problems, should they choose to remain at a bank who will not pay for ai/ml platforms?
Perhaps it's time for compliance officers, after demonstrating the ability of ai to bank leadership, insure that budgets for 2023/2024 are expanded to allow for the acquisition of such platforms, lest the bank's failure to adopt them leads to a massive compliance failure, with the compliance director left holding the proverbial bag. Use your own personal risk-based program, and insist that it be brought online, to avoid such a potentially dangerous outcome. I know that I wouldn't want to remain where I didn't have everything in my toolbox to catch money laundering and financial crime.