- Google Cloud asserts that its brand-new AML AI service relies on machine learning to detect money laundering rather than requiring bank employees to define detection rules manually.
- According to Google Cloud, HSBC reduced false positives by more than 60% using AML AI.
Google LLC’s cloud division recently unveiled a new service that uses artificial intelligence to help financial institutions identify money laundering. Anti Money Laundering AI, or AML AI for short, is the name of the service.
In the past, banks had systems to detect illegal financial activity supposedly based on rules. Users in such systems manually define the type of transactions that should be flagged. Then, using user-defined detection criteria, automation algorithms compare transactions, and if a match is found, an alert is generated.
Traditional detection methods must be manually modified to recognize newly developed money laundering techniques. Sometimes the process is slowed down by the necessity of manually making configuration changes. Because of this, it might be challenging to respond quickly to new money laundering tactics.
Google Cloud asserts that its brand-new AML AI service provides a more effective substitute. It relies on machine learning to detect money laundering rather than requiring bank employees to define detection rules manually. Banks reportedly have the option to alter some workflow components if necessary.
Efficiency can be improved by increasing automation in the money laundering detection process. The search engine giant claims that after deploying the service, HSBC Holding plc, an early adopter of AML AI, began identifying two to four times more suspicious activity.
Due to their accuracy limitations, traditional rules-based detection systems can miss suspicious activity and flag legitimate transactions as fraudulent. False positives are incidents like these. According to Google Cloud, HSBC reduced false positives by more than 60% using AML AI.
Employees of a bank can save time by reducing alert volumes. Workers can concentrate on reviewing suspicious activity rather than investigating false positives. Google Cloud says that reducing false positives can also improve the customer experience. If a valid transaction is flagged as suspicious, banks have to hold it up for review, which is a waste of time.
The AML AI generates an alert and highlights relevant items when it detects suspicious activity. The service lists the transactions that prompted its AI algorithms to raise the alarm. AML AI also presents additional contextual data to help expedite investigations.
One of many financial institutions to use the service is HSBC. Banco Bradesco S.A., one of the biggest banks in Brazil, and online bank Lunar, based in Denmark, are two additional early adopters.
Thomas Kurian, CEO of Google Cloud, said, “Building on our commitment to bring AI-powered innovation to the financial services industry, we are launching Google Cloud’s AML AI to help financial institutions more accurately and efficiently identify AML risk while enhancing business operations and governance.”
In the past two years, Google Cloud has introduced several industry-specific offerings for the financial sector, with AML AI being the most recent.
A reference architecture that the company previously released makes it simpler for banks to connect their infrastructure to the SWIFT international payments network. Datashare, a cloud service, was previously introduced. Financial institutions can now more easily access the market data they need to make investment decisions thanks to the latter offering.