Google Cloud today announces the launch of Anti Money Laundering AI o AML AI, an AI-powered system designed to help global financial institutions detect money laundering activities more effectively and efficiently.
Google Cloud has the problem of money laundering
Il money laundry it is a complex problem with a growing global impact. It is estimated that the amount of money laundered each year is equal to 2-5% of world GDP, or up to $2 trillion a year. Its proceeds are often linked to illegal activities ranging from drug and human trafficking to financing terrorist operations.
Today’s programs anti-money laundering they absorb significant resources for financial institutions, many of which operate through a variety of global and regional regulatory bodies. In fact, large financial institutions report monitoring nearly billions of transactions a year for increasingly sophisticated malpractice.
Most traditional anti-money laundering monitoring systems rely on manually set parameters, which results in low effectiveness in detecting suspicious activity. Even in the most advanced implementations of these rule-based systems, money launderers can learn how get around them and avoid being identified.
In reality, over 95% of the reports generated by these systems turn out to be “false positives” already in the first phase of review and about 98% of them never lead to the detection of a suspicious activity report (SAR). The high false positive rate requires manual review, costing the industry billions of dollars annually in wasted investigation time and distracting institutions from the real suspicious activity.
Google Cloud, AML AI helps global financial institutions improve risk detection and reduce operational costs
Google Cloud AML AI provides a consolidated customer risk score, generated by machine learning (ML), as an alternative to rule-based transaction alerts. The risk score is based on bank data, including transaction patterns, online behavior and Know Your Customer (KYC) data, to identify high-risk retail and commercial customer cases and groups. The solution can adapt to changes in baseline data, providing more up-to-date and accurate results that improve overall program effectiveness and operational efficiency.
Google Cloud’s AML AI uses a proprietary ML technology, as well as Google Cloud technologies, such as Vertex AI and Big Query. The system handles the complexities of executing ML at scale while providing enriched explanations of the findings to enable financial institutions to accelerate investigation workflow and optimize the customer experience. To date, the solution has been implemented into production in several geographic jurisdictions.
The advantages that Google Cloud offers
Google Cloud’s AML AI solution offers the following benefits:
- Increased risk detection: AML AI can outperform current systems in detecting financial crime risk. Google Cloud customer HSBC is now able to detect 2 to 4 times more truly suspicious activity, improving its ability to identify and prevent money laundering activities.
- Reduction of operating costs: AML AI limits wasted time, reducing the volume of reports and providing intuitive results that expedite individual investigations. In fact, HSBC has seen reporting volumes drop by more than 60%.
- Improving governance and defendability: AML AI provides financial institutions with verifiable and explainable results to support internal risk management. This approach has already been adopted in production in several geographic jurisdictions, each with its own regulatory requirements.
- Customer experience improvementBy increasing accuracy and significantly reducing false positives, AML AI minimizes the need to engage customers for additional compliance checks.
HSBC, Bradesco and Lunar see significant value in an AI-powered anti-money laundering system
Using Google Cloud’s AML AI as the core, HSBC has adopted a cloud-based AI first approach as its primary anti-money laundering transaction monitoring system in key markets. Google Cloud’s AML AI has helped HSBC improve detection capability, deliver more accurate results, and significantly reduce batch processing times for its large customer base. As a result, HSBC received the Celent Model Risk Manager Award for the year 2023.
AML AI helps its customers to reduce operating costswhile improving the validity of their anti-money laundering system. In the future, Google Cloud plans to provide generative AI foundations for the financial services industry with the goal of increasing employee productivity, for example, to reduce the time it takes for an analyst to investigate potential suspicious activity.