On October 28, we held our second virtual conference this year: The AML Cost Takeout Summit. Our first virtual summit, in May, was dedicated to digital transformation and Hyper Automation generally. This conference was focused on automating anti-money laundering operations in banking specifically. Participants were able to hear from industry experts and innovators and see some AML automation solutions in action, in real time.
As a recap for those who attended, or preview for those who want to watch on-demand, here are some takeaways from the Summit sessions.
1. Anti-money laundering is still a pain point for banks
Just recently, AML issues for several banks have been brought to life, with news stories describing international violations and new regulatory policies to fight financial crime. Despite the huge budgets allocated to AML, vast operational and technology organizations and state-of-the-art technologies used, many AML operations continue to be ineffective.
According to Sameer Jain, Former CIO/CTO at Barclays & UBS, the financial services industry will continue to face increasing regulatory challenges. To keep up, banks will need to automate their AML processes. However, simply automating inefficient processes will not be enough: They need to be streamlined, end-to-end — which requires not just an enterprise automation platform, but deep domain expertise from vendors.
2. AML costs have become too high
As regulatory policies become stricter, sanctions compliance costs continue to grow. According to LexisNexis® Risk Solutions 2019 True Cost of AML Compliance Study, financial services firms spend an average of $14.3 million on AML compliance every year.
This rising cost is among the main drivers for adopting Intelligent Automation for many banks, and Bank of Pakistan is no exception. Jim Stubbs, CEO of National Bank of Pakistan, Americas, stated that the cost of anti–money laundering in the bank had gotten so high that they needed another kind of AML solution to bend the curve.
3. AML automation provides a new level of transparency for regulators
According to Andrew Szabo, Vice President of Scotiabank, who has led automation there for more than three and a half years, one of the most significant benefits of automation was transparency for regulators. By automating anti–money laundering efforts, they could create fully auditable processes, where they recorded every single step.
When talking about the bank’s first steps in AML automation, Andrew recalls:
We had a number of discussions with our senior leadership who agreed that this [AML automation] would be a very interesting thing to look at, and we started building automations. At first, they were very small, but it’s incredible how meaningful they are when a regulator looks at your records.
4. Intelligent Automation expands the AML capacity of your team
Anti-money laundering operations are highly manual and have to be performed by small armies of people. During the Customer Perspectives Executive Panel, Andrew Szabo of Scotiabank even said his organization ran out of physical space for personnel and had to buy new buildings to seat the compliance team. Ever-expanding teams are costly, not scalable, and lead to compounding compliance debt.
An alternative to continuously adding new people is to streamline existing operations using Intelligent Automation that leverages pre-trained solutions, with pre-built connectors which remove mundane tasks and free employees to focus on more meaningful work.
5. AI + People works significantly better than AI alone
Companies that use just one way of collaboration between artificial intelligence and people (for example, AI decides and a person confirms the decision) are 6x less likely to achieve meaningful financial results than companies that use five or more ways.
As WorkFusion CEO and President Alex Lyashok said in his session, “Intelligent Automation Powers the Modern Bank,” the Human-in-the-Loop approach, when people and AI continuously work together in a real-time workflow and learn from each other, has a meaningful impact on how financial benefits translate to the business.
Bonus: WorkFusion Product demos
WorkFusion’s Solutions Team also offered several demonstrations of our product and two pre-built AML solutions:
- Name Screening Alert Review: Allows analysts to reduce by 60% the time spent on reviewing alerts generated by name-screening tools
- Adverse Media Monitoring: Helps reduce manual work, mitigate compliance risks and get real-time insights into your operations
If you would like to learn more about WorkFusion’s AML automation solutions, feel free to contact us.