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Next generation of compliance to be powered by AI and advanced analytics

After the immense success of its OpenGovLive! event with delegates from the Philippines FSI sector yesterday, OpenGov Asia delivered another inspiring event with the audience from the same segment in Singapore on 19 August 2020.

The event was a testimony to the timeliness of the topic: Powering-Next Generation compliance through Advanced Analytics and AI. The 100% attendance and a high level of interaction from delegates was further proof of its relevance.

Mohit: Use technology to thrive and outdo adversaries in cyberspace

The session was opened by Mohit Sagar, Group Managing Director and Editor-in-chief at OpenGov Asia.

Mohit highlighted the uncertainty and lack of trust among individuals and organisations with the new norm of work in place.

He alluded to the increasing instances of data masking and a lack of trust amongst organisations as a result of such activities.

He emphasised the use of advanced technologies in these times – both to thrive as well as to outdo the adversaries in cyberspace.

On the issue of compliance, he felt that had to be seen as a part of the big picture and not in isolation. Compliance must be part of a robust framework that necessitates using AI and Analytics to derive desired and clean outcomes.

However, it is important to understand that technology can only augment existing human resources, not replace it.

He concluded by stressing the need for focused leadership and the need to collaborate with partners who champion the field of technology.

Remco: Effective fraud and risk management solutions are available

After Mohit Remco den Heijer, Vice President- ASEAN for SAS presented his take on the topic for the delegates.

He began by introducing the company briefly and talking about how SAS used analytics to effectively share data around the pandemic with the public using free dashboards.

He shared that their objective as an organisation is to improve lives my making better decisions and they do it by providing a wide range of tech driven solutions to their customers.

Remco then spoke about some of the incredible projects done by SAS in the financial sector industry that are supporting areas like digital transformation, customer experience, risk management and fraud & security management.

Making it relatable for the audience, he delved deeper into fraud and security management solutions. Elaborating the myriad of ways in which it can help financial organisations including monitoring, conduct assurance, financial intel and compliance, market and trade surveillance.

He concluded by highlighting SAS’s strength as leaders in the field; not only do they only have solutions for payment fraud and anti-money laundering but are champions in data and analytics.

Ahmed: Regulators recognise the benefits of tech in anti-money laundering initiatives

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

He began by talking about the challenges in using the traditional AML solutions; key among these is their inability to cope with the high volume of online transactions. Ahmed then explained how their solutions can help overcome these challenges.

He talked about other stakeholders in the industries, like regulators, who also recognise the benefits of using AI and ML in anti-money laundering initiatives. These stakeholders are now concretely encouraging the use of these technologies in the field.

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.

Ahmed went on to share a visual 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 phased approach was a key insight into how SAS helped organisations improve operational efficiency and reduce false positives.

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.

In concluding, he presented a bouquet of SAS offerings – Financial Crimes Analytics Solutions – that help monitor and prevent fraud incidence in organisations.

Nitin on what the next generation of compliance will look like

After Ahmed’s insightful presentation Nitin Parmar spoke from his perspective as a Partner-Financial Crime Unit at PWC Singapore.

Nitin covered in detail what the next generation of compliance is going to look like. His presentation had the following broad focus points:

  • Machine-readable regulations: Making regulations machine-readable is going to be simpler to translate them into computer programs and linking them with other regulations. This facilitates easier compliance.
  • AI and ML for customer life cycle management: Contextualised automation, perpetual KYC, Adverse media screening and intelligent profiling are some areas that can leverage AI and ML to maintain and managing customers.
  • AI and ML for Monitoring and surveillance: AI/ML-based detection and monitoring systems are the way forward as the bad actors are utilising tech in their workings.
  • Responsible use of AI: There is a need for organisations to understand both the challenges and risks around AI before designing and deploying it in their organisation’s workings.

He concluded by once again highlighting the importance of compliance for financial organisations and the necessity of strengthening it with AI and Analytics.

After Nitin’s powerful insights the session moved to an interactive session where delegates responded to questions addressed to them.

On the first question of the main challenges faced during the AML investigation process, 41% of the audience voted for high rates of false positive.

A senior official from a major bank shared that he voted for false positive as the effort around the disambiguation in case of a false positive can be a big drag to the investigation as a lot is still left to manual processes.

On the next question of the current position in their AML journey, a major chunk of the audience (60%) voted that they are still looking for technology that can complement their existing AML solution.

A senior financial executive reflected that they already have an AML system in place focusing on trade surveillance and communications. They are looking for a solution that complements these goals.

On the final question of whether their organisation has a real-time fraud detection, prevention, and monitoring solution, that is working together with an AML solution, more than half of the audience voted that they have a fraud detection system, but it is separate from the AML.

Another member of the audience shared that with the increased online transactions, the fraud and money laundering risk has gone up. And although his organisation currently has a separate fraud detection system and AML, they are looking to integrate the two to make the security system more robust.

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

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