3 in 4 Singaporean banks see AI stopping money laundering

Photo by Mike Enerio

Many banks in Singapore remain unsure how to operationalise artificial intelligence, but 73% believe AI will strengthen anti-money laundering efforts, a recent survey by global analytics software firm FICO reveals.

FICO’s Integrated AML Compliance Survey was produced in May 2020 using an online, quantitative poll of 256 senior executives from banks across Australia, Hong Kong, Indonesia, Malaysia, New Zealand, Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam.

When asked about the efficacy of much older rules-based technology, 86% of Singaporean banks say they still believe in the ability of these AML systems, despite 36% saying they experience significant struggles modifying them.

“Rules-based compliance systems continue to be the workhorse for banks in Asia Pacific when fighting financial crime,” said Timothy Choon, FICO’s lead of FICO’s financial crimes group in Asia Pacific. “However, some early adopters are starting to embrace the new world of AI and realise that the decade-old rules-based systems can’t keep up with sophisticated threats on their own. “

The survey showed that the key challenges for existing AML compliance solutions regionally were the ability to meet new types of compliance risks in channels and products; the capacity to provide an end-to-end integrated compliance solution; and the facility to update quickly to changes in regulation.

In Singapore, 95% of banks said they will continue to invest in compliance in the year ahead and 23% plan to significantly increase this investment in 2021.

“This survey, conducted in May, shows that even in the recent economic downturn triggered by the pandemic, banks remain committed to targeted spending that boosts their AML compliance defences,” said Choon. “There is an increased willingness to perceive compliance and fraud as a common financial crime risk – a fraudster is more likely to launder money, and vice versa.”

He said banks in Asia Pacific are looking to markets like the United States and the United Kingdom to see what will work, with plans to follow quickly in the next 24-36 months.