While complying with regulations is never the highest of your priorities, how you manage compliance with KYC / AML laws is critical to your financial institution. When optimized, it can be a competitive differentiator.

Money laundering, like all frauds, is growing in volume and complexity. Therefore, new approaches are required to streamline processes. This will reduce your cost of compliance and create a frictionless customer experience. Advanced tools like AI, machine and deep learning are necessary elements to instantly detect potential money laundering and reduce time-consuming false positives.  

Surging Money Laundering Cases

Similar to all manner of fraud during the COVID pandemic, money laundering is on the rise. The UN and IMF’s latest estimate of the annual amount of global money laundered is USD$2-$4 trillion. 

As cockroaches hide from the light, criminals scurry from increased scrutiny. As a result, we have seen new money laundering schemes arise as others have decreased due to greater focus by authorities. To combat new and legacy money laundering tactics, your organization must utilize the power of AI/ML to more efficiently review and detect potential cases. 

Supercharge Your KYC/AML Compliance Program

The COVID pandemic has also brought monumental change. In order to improve their agility and resilience to survive, the pandemic has forced financial institutions and other enterprises to implement digital transformation initiatives. In combination with big data and advanced analytics, strong AI/ML models are a critical part of KYC/AML compliance programs’ digital transformation. Utilizing brawny AI tools like deep learning, improves bank’s compliance efficiency with KYC/AML regulations and results in faster detection of transactional anomalies. Below are the top six reasons why you need a more robust AI-powered KYC/AML compliance program:

  1. Enhancing the Customer Experience – Complying with KYC laws does not mean you must have an onerous on-boarding process to gather the necessary customer information.  With effective AI tools, you can comply with KYC without harming the customer experience. Most importantly, to comply with KYC while creating a frictionless process for your customers, you need an irrefutable real-time identity assurance model. Solutions such as Fraud.net’s Identity services provide hundreds of critical identity proofing data points to confirm your new accounts.
  2. Reducing False Positives – Most institutions have false positives of 95 – 99%. One report estimated that globally banks spend over USD$3 billion per year investigating false positives. As a result, this puts a major strain on FIs and results in an inefficient use of resources. Utilizing leading AI technology can reduce false positives to more manageable levels. 
  3. Moving to Perpetual KYC – To maintain compliance and improve processing efficiency, leading FIs are moving towards perpetual KYC. This change turns a reactive process into a proactive mindset, with the help of powerful AI models to continually monitor customer changes and circumstances. For example, waiting a year to refresh customer data is eons for criminals that are moving fast and laundering in new and innovative ways. Working with providers like Fraud.net, you gain real-time, event-based monitoring of customer details and circumstances. 
  4. Growing use of Cryptocurrencies – Because of the scrutiny within the FI sphere, criminals are turning to cryptocurrencies. The anonymity that virtual currencies offer is a natural hiding spot for criminals. In response, new AI models are becoming increasingly necessary to identify the abnormalities in transactions. Such as deep learning models to analyze linkages and make inferences based on the connections to detect crypto laundering. Also, entity analysis helps you visualize criminal relationships and transactions for easier detection of laundering. 
  5. Escalating Trade-based Money Laundering – Relatedly, criminals are turning to trade-based money laundering (TBML) to avoid banking’s higher levels of surveillance. Annually TBML involves an estimated $2.2 trillion in illegal proceeds. It brings many challenges by operating outside of traditional FI, and utilizing various goods and methods to carry out fraudulent commercial transitions. But there are two strong solutions available to harden the defenses against TBML – blockchain and AI. With blockchain, the transparency inherent in the transaction provides the visibility and integrity to more easily detect fraudulent transactions. AI/ML models offer the ability to decipher billions of pages of trade documents, and utilize entity analysis for reviewing third-party networks and complex transactions. The horsepower available in AI/ML tools, such as what Fraud.net offers, gives you a stout ally in identifying fraudulent trade transactions. 
  6. Increasing Collaboration and Data Sharing – Similar to the increasing interest by organizations in sharing fraud data for enriching insights on perpetrators, FIs need to begin sharing their anonymized AML data and models. While collaboration and data sharing is a major paradigm shift, the increasing coordination and sophistication of criminals, requires new tactics. Plus, criminal organizations typically launder money across FIs, making it a challenge for an individual FI to detect, but when aggregated, the laundering scheme becomes clearer.  You gain a powerful tool in your KYC/AML arsenal by utilizing data consortiums like Fraud.net’s Collective Intelligence Network to enrich your data stores. 

Transform your KYC/AML program into a differentiator

The combination of increasing money laundering activity and the likelihood of expanding KYC/AML compliance requirements, means you need a partner to help transform your program. KYC/AML compliance will always require a combination of people, process, and technology to succeed. At Fraud.net, we believe strengthening the technology element will strengthen all elements of the triad.

Fraud.net Solutions for KYC/AML

Fraud.net’s unified solutions for KYC/AML compliance brings together proprietary and third-party data, and advanced AI capabilities. You set the policies, and we help with the rest. Our AI/ML models are expertly engineered with the nuances of your business already built-in. Fraud.net’s proprietary, adaptive scoring system performs a detailed analysis and delivers rich insights through intuitive dashboards.  


With a powerful portfolio of solutions for financial institutions, Fraud.net can provide the AI tools that meet your unique needs to quickly and cost-effectively detect criminal behavior. Contact us for a free demo.