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Global Finance Magazine: De-Risking: The Next Chapter
July 23, 2021
From the article:
Fixing AML: Can New Technology Help Address the De-risking Dilemma, a 2018 report by the Center for Global Development (CGD), assesses six technologies—biometrics, KYC utilities, machine learning, big data, blockchain and legal entity identifiers—and their potential to solve the de-risking problem. The report’s authors conclude that more regulatory guidance and experimentation with machine learning is needed, and that solutions such as legal entity identifiers and biometrics need to scale internationally or into developing countries before they can make a real difference.
“In many cases, AI is far more robust and accurate than what has gone before,” says Vijaya Ramachandran, one of the report’s authors and a nonresident fellow at CGD. “It has enormous potential to identify patterns related to human and drug trafficking.”
The challenge, according to Ramachandran, is that AML regulation is exceedingly based on things like suspicious activity reports (SARs). “It doesn’t yet support the kinds of technologies we’re seeing emerge, much to the frustration of the tech companies developing them.”