KYC and AML Tools

The Benefit of Artificial Intelligence Enabled KYC (Know Your Customer) and Anti-Money Laundering Tools

Artificial intelligence (“AI”) is a powerful tool that has been widely deployed in various industries. Due to its great potential for a positive impact on the company that deploys it, the industry players have since been looking forward to acquiring AI-enabled tools to address the difficulties faced with KYC and AML compliance.

Why the AI; or what benefits does the employment of AI entail?  With its automated nature, AI is able to solve a myriad of issues. One of the advantages of using AI is that it can bypass complex human factors. Human-making decisions can be subjective because it involves emotions and biases. However, with the involvement of AI, this could be eliminated or prevented. As a result, we can expect increased efficiency and accuracy in solving problems, especially issues that require more human-making decisions. In addition, AI can save our time with its ability to distinguish anomalies or particulars that are in nature difficult to identify.  As such, we can ensure the result from the KYC/AML will be of good quality.

Here are the benefits of an AI-enabled KYC/AML tools: –

Link Analysis

Human tends to fail at comprehending massive data sets with numerous objects of different variants. By having an AI-enabled KYC/AML tools in place, the data/information will be analyzed with data analytic techniques based solely on the algorithm Hyperlink Induced Topic Search (“HITS”) which models complex webs of linkage data evidence into nodes and links, which allows for more insight and accuracy in AI-based decision making. The AI-based link analysis is deployed to augment KYC and Know Your Customer’s Customers (“KYCC”) processes by creating multilayer hierarchical networks for relationships between customers, their organizations, suppliers, and business partners.

Unstructured Data Analysis

As the Monetary Authority of Singapore (“MAS”) has been regularly updating and increasing its regulation, guidance and report, information overload is a significant issue. By utilizing Natural Language Processing (“NLP”) and supervised learning techniques. These techniques allow AI to analyze unstructured content, extract metadata, identify entities and automatically interpret documents.

Pattern Recognition

Generally, money launderers will deploy multiple layers of masks to conceal the original source of funds. As opposed to rule-based software, AI-enabled tool is more capable of resolving complex patterns. By implementing Bayesian learning techniques in the AI-enabled KYC/AML tools, it can compute multiple probabilities of the hypothesis, with conditions on the input features and all the past examples to generate a realistic possibility, which in return allows the compliance officer to have a better understanding of the legitimate behavior to initiate investigations and possible Suspicious Activity Reports (SARs).

Workflow Automation

AI can automate generic content creation (e.g., Generate documents, reports, notifications and audit trails), risk profiling, due diligence information and links to data sources in a short period. As a result, the process which the compliance officer originally performed will be fully automated. In return, allowing the compliance officer to prioritize in a more in-depth assignment.

Conclusion

The purpose of this article is to provide you, our client, the knowledge of how AI-enabled AML/KYC tools will be implemented in the existing AML/KYC tools to solve the difficulties faced in KYC/AML compliance.

Credence Consulting Pte. Ltd. has employed various KYC screening tools that encompass an extensive range of databases throughout the world, some of which will incorporate AI in the near future to aid our role to conduct more efficient KYC and AML processes for the benefit of our clients. We also employ the most up-to-date tools to ensure that we are providing the best due diligence process on behalf of our clients. Should you require further assistance, you may reach us at business@the-credence.com.

 

Disclaimer:

The information provided herein is for informational purposes only and should not be construed as professional or legal advice. While Credence Consulting Pte. Ltd. (Credence) believes that its sources are reliable, we make no representation or warranty as to the accuracy of the contents. You should contact your legal counsel to obtain advice with respect to any particular matter raised. The opinions expressed here or through our website are the opinions of the individual author only and are not legally binding, and may not reflect the opinions of Credence or any individual partner or director.

Leave a Comment

Your email address will not be published.