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Advanced Analytics and AI: backbones of fraud prevention and security intelligence for FSI

In continuation of the Virtual Breakfast Insight series in collaboration with SAS, OpenGov Asia delivered another enlightening event on 18 August 2020: Powering Next Generation Fraud Prevention and security intelligence through Advanced analytics and AI.

The audience for this event comprised of delegates from the financial sector industry based in the Philippines with full house attendance.

Mohit: need to integrate tech with traditional fraud prevention measures

The session was opened by a welcome address and round of introductions by Mohit Sagar, Group Managing director and Editor-in-Chief at OpenGov Asia.

Mohit also spoke about increased cyber risk and fraud that arose during the pandemic and with the new norm of working.

Being aware of the increased vulnerability of the user in cyberspace the bad actors are always on the lookout to capitalise on this situation.

He emphasised the importance of fraud prevention and the need to integrate technology in that process.

Gone are the days when human eyeballing used to suffice, as the bad actors in cyberspace are becoming more and more sophisticated. He concluded his presentation by advising the delegates to collaborate with partners who champion cyber risk and fraud prevention.

Making it inevitable for users and organisations to keep themselves up-to-date with the technology solutions available in the area and deploying them.

In the same vein, he warned the audience about the challenges of creating a risk management system of their own during these times.

Ryan encouraged analytics adoption to prevent fraud

After Mohit, Ryan Guadalquiver, Country Manager, SAS Philippines delivered are thought-provoking introductory address.

Ryan began by emphasising how digital adoption by individuals and organisations has gone up tremendously since the pandemic hit the world.

People’s engagement with e-commerce and e-banking has gone up spectacularly; this, however, has also increased the risk of financial fraud dramatically.

This is because the online security systems have not undergone updates to tackle the huge volumes of online transactions.

Therefore, it is critical for organisations to use analytics, not just for managing their digital interactions, but for preventing the risk of fraud by embedding it in all their compliance protocols and in their working.

He shared in detail how SAS offerings, with its singular focus on analytics, can help with that. To further make it relevant for the audience, he enumerated the specific areas in SAS’s banking value chain – retail and private banking, customer experience, capital markets & investments and wealth and Insurance.

He concluded by delving specifically into the fraud and security intelligence solution and how it could help the delegates.

Ahmed explained challenges in using traditional AML solutions

After Ryan, Ahmed Drissi, the anti-money laundering lead (APAC) for SAS spoke about AI and ML in the context of anti-money laundering.

He began by talking about the challenges in using traditional AML solutions as they are not up to date with the high volume of online transactions. He then explained how their solutions can help overcome these challenges.

Ahmed shared that other stakeholders in the industries like regulators also recognise the benefits of using AI and ML in anti-money laundering initiatives and are encouraging it now.

He supported this by sharing examples of financial regulatory authorities in the USA, UK, and Singapore have started recommending the use of AI and ML in the context of anti-money laundering.

He further went on to share a graphic representation of the three phases of AI and ML adoption cycle as done by large global and regional banks. The three phases are Innovation, Adoption and Maturity.

This representation helped explain how the solution helped organisations improve operational efficiency and reduce false positives. He finally put out the SAS offering or the Financial Crimes Analytics solution that helps monitor and prevent fraud incidence in organisations.

He also enumerated various AI and ML use cases in AML that include entity resolution, customer segmentation, post alert scoring, model detection, tuning and optimisation.

David felt tech in regulation and security is non-negotiable

After Ahmed, Dr. David Hardoon, Senior Advisor – Data and Artificial Intelligence, Union Bank highlighted the power of using advanced tech like AI and ML. Its efficacy lies in its ability to go beyond a single representation of an individual or an entity rendering a better understanding of fraud risk.

He emphasised the fact that using tech in regulation and security is something non-negotiable and validated it with a recent case study from Germany.

To further stress his point, he shared how the supervisors and the regulators of the industry are also implementing and encouraging the use of new tech.

He concluded by pointing at the significant paradigm shift in organisations’ approach in handling fraud incidences from initiating action after something irregular has been detected to taking actions to prevent the fraud risk.

David highlighted that this is a big step for organisation on their journey towards having a robust risk and fraud management system.

After David’s powerful session, the session moved to a more interactive time with the polling questions for the delegates.

On the first question of challenges faced during the AML investigation process, the participants gave a very mixed response with almost 31% choosing high rates of false positives.

A technology head from a major bank shared that for their organisation time was is the biggest challenge. They need more time in not just deploying the tech, but also in upskilling their workforce.

On the next question of where you are on your current AML journey, a majority of the audience voted for “we are looking for a technology that can complement our existing AML journey” (57%).

On this, another senior delegate shared that he voted for the above-mentioned option because they are always looking to improve as a bank and are open to adopting new technologies. They are still looking for a technology that best compliments their existing AML solution.

On the final question of does your organisation have a real-time fraud detection, prevention, and monitoring solution that is working together with an AML solution, more than half of the participants (54%) voted for having a fraud system but separate from the AML solution.

One of the delegates reflected that their organisation currently has a fraud system and an AML system but they are both separate from each other. However, he also shared that they are in the process of stitching it together on a singular platform in the near future.

After the polling session, Ahmed once again took over to conclude the session with closing remarks. He thanked all the delegates for their time and participation in the event. He also said that adopting tech in regulation requires a laser light focus and that is something SAS champions. Ahmed encouraged delegates to engage and collaborate with them if they are working towards it.

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