Transforming Anti-Money Laundering from a necessary burden to a business benefit

Europe’s banks are undergoing one of the greatest periods of transformation in their 800-year history. Banking models that prioritised delivery through branch networks are disappearing, replaced by digital as mobile takes control of more of our own and our customers’ lives. This digitalisation – particularly accelerated by COVID-19 – has helped create a rapidly widening opportunity for fraud, with criminals able to exploit gaps between digital solutions, banking systems and customers.

Money laundering has grown rapidly as regulation and bank processes struggle to keep pace with the rise in criminal innovation. To help interpret what’s happening and how the industry should respond, Banking Circle commissioned research of 300 senior decision-makers in European banks as well as conducted interviews with industry experts. The results are published in a white paper, ‘Better by design? Re-thinking AML for a digital age’.

We ask how the approach to AML can be improved: Can broader adoption of Artificial Intelligence and Machine Learning bring business benefits? What is the role of AML in the broader context of digital transformation? And can targeted action combat digital crime if it is designed in a way that complements, not conflicts with, the business of banking?

Key issues identified include:

• How Artificial Intelligence and Machine learning can enhance the approach to AML
• The role of data quality
• Success will come from adopting an approach that complements, not conflicts with, the business of banking

The message from the industry’s senior decision makers is clear. Successful AML strategies are about more than just complying with regulatory rules, and their implementation should not be limited to the compliance team. Now and in the future, fighting money laundering means having the right technologies in place, backed by optimal organisation design and robust data and analytics.

Indeed, far from being a burden, the right approach to AML can be an enabler – driving efficiencies and leaner processes, and in turn helping to create the mindset for urgent digital transformation initiatives.