How AI Will End Financial Crime.
Over the past couple of decades, the rise in banks reliance on technology has also come with an increase in financial crime. So much so that PwC’s Global Economic Crime Survey reported around 50% of firms experiencing cybercrime in the past two years and 64%of respondents said losses due directly to their most disruptive fraud could reach US$1 million.
An London AI based startup focused on detecting Financial crime, called “Mimiro” recently raised $30 million in funding for its AI-driven solutions. This success shows the recent boom of the regulatory technology sector.
Companies like Mimiro have seen such a large increase in customers due to more and more firms releasing the benefits of AI compared to the current relatively ancient security systems.
A large role AI systems are beginning to play is in reducing compliance costs.As costs of compliance with regulations such as “Anti-Money Laundering” increase,firms have more incentives to spend on AI, especially with large firms spending up to $500 million on the “Know Your Customer” compliance regulation.
Implementation of AI in security systems can also lead to a fall in false flags as AI systems will learn from false positives and adjust its weightings to provide more accurate results in the future.For example previously mentioned Mimiro’s machine learning solution has lead to a 70% fall in false positives for its clients, leading to a fall in costs as less resources are wasted in dealing with false alarms.
As more firms see the success of AI in stopping financial crimes in other firms there is no doubt this application of AI will continue to be adopted and improved leading to large productivity gains for the whole industry.