Editor ’ s note : This article is the first in a two-part series on the potential effects of artificial intelligence ( AI ) on the anti-financial crime ( AFC ) profession .
I thought writing this article was going to be simple . I was going to profess my love for the immeasurable potential AI has and its ability to make our lives easier , to make our work more productive , and to create new jobs ― with titles we cannot even think of yet . I believe AI will do for us what cars , planes , personal computers , the internet and social media ( for the most part ) have and continue to do for us now : add extra and positive dimensions to our lives . And remember , we are continuously regulating and supervising those industries now . AI , while providing immense help to all fields from education to health care , can go sideways if we do not maintain proper oversight .
The goal of this article is to not only offer a positive outlook and message regarding AI and its current and potential impact , but also to emphasize that AI is the next evolution in human ingenuity . As such , it needs to be supervised for it to have the maximum impact , especially as it pertains to careers , job growth and the employment market . That is the only way we will be able to harness its benefits for all and create positive net job growth . Both the AI freewheelers and the Luddites must work together to make AI the most powerful tool it can be . History provides a positive outlook on what AI will potentially do . In the book The Work of the Future , the authors state , “ History and economics show no intrinsic conflict among technological change , full employment , and rising earnings . The dynamic interplay among task automation , innovation and new work creation , while always disruptive , is a primary wellspring of rising productivity .” 1 We can breathe a sigh of relief . AI will not deviate from past technological transformations . There should not be conflict ; however , we need to hammer down on the “ disruptive ” part of this statement .
AI is not coming ― it is here
Let us first discuss how AI is being intertwined into the compliance and anti-money laundering ( AML ) and fraud programs at financial institutions ( FIs ) now . It is important to realize AI is having a significant impact in the fight against financial crime already . The financial services industry is only increasing how it leverages AI to enhance compliance programs , reduce risk and improve operational efficiency . AI ’ s capabilities in data analysis , pattern recognition and predictive modeling make it an ideal tool for identifying and mitigating compliance risks . The following are some of the ways AI is making financial crime compliance ( FCC ) programs more efficient and productive .
Data analysis and monitoring
AI-powered systems are processing vast amounts of data ― including transactions , communications and customer information ― to identify unusual activity . Machine learning algorithms detect anomalies , suspicious activity and trends , enabling compliance teams to better identify reportable transactions . Some fintechs and forward-thinking banks are creating these tools in-house . But there are many vendors that are providing these tools to financial services firms . Go to any ACAMS event and you cannot miss them . David Caruso , vice president of Financial Crime Compliance at WorkFusion , a pioneer in creating AI agents for FCC , says , “ Keep this important fact in mind : Right now , after more than 20 years of AML and trillions of dollars spent on people and systems , we still detect very little money laundering . We can bicker over what percentage we detect , but it ’ s in low single digits ― maybe 1 % or 2 %. However , it also means there is a significant opportunity to improve ! If the promise of AI turns out to be accurate , the AML personnel chart will look different . There won ’ t be tens of thousands of onboarding , screening and transaction monitoring analysts . Those jobs will transform into investigator /[ quality assurance ( QA )] roles . The premise is simple : If AI will clear away much of the programmable data gathering , it is logical to predict that it will evolve to detect actual suspicious activity better . Some of these activities will be basic , like structuring . But much more will be complex . This new and novel data requires critical thinking and strong writing and communication skills to present [ suspicious activity reports ] and high-risk [ enhanced due diligence ] reviews .” 2 Again , AI will cause disruption in the AML organizational chart , but that disruption will be more of a shift than an elimination of AML jobs .
Customer due diligence ( CDD ) and know your customer ( KYC )
AI-driven solutions can enhance CDD and KYC processes by analyzing customer data , identifying potential risks and streamlining the verification process .
Overall , the implementation of AI in FCC programs has helped enhance suspicious activity detection , improved operational efficiency , reduced false positives requiring manual review and increased transparency . Although there
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