Google Cloud unveils AI-powered tool to combat money laundering

Google Cloud has introduced a new tool that is intended to assist financial institutions in identifying money laundering. The Anti Money Laundering AI (AML AI) tool, which uses artificial intelligence to detect suspicious activities, has already been tested by HSBC.

The new method uses AI to generate a risk assessment using data from banks. This includes network trends and KYC data.

Money laundering is regarded as one of the most significant and expensive problems confronting the financial services industry. It is also a growingly complicated and worldwide issue. Google claims that $2 trillion in laundering occurred just last year, with 2% to 5% of global GDP passing through the system on average each year.

This money is linked to crimes, including the trafficking of drugs and people, as well as the support of terrorism. The amount of resources needed to track the money includes countless hours of human analysis, labor across many states, and reporting to various regulatory organizations.

As an alternative to a ruled-base warning, AML AI generates an aggregated risk score. It monitors patterns and behavior to provide a "money laundering score" rather than sending out an alert when specific predefined parameters are satisfied. It is based on bank data, which includes trends, network activity, and know-your-customer data. This enables the AI to rapidly adjust to changes and especially monitor high-risk retail and business consumers.

 

HSBC tested Google Cloud's new tool against money laundering

The new product's beta tester, HSBC, discovered that it was more effective than existing methods in identifying the danger of financial crime. They discovered an increase in true positive risk of two to four times and a 60% decrease in alert volumes. This lowered operational expenses and accelerated detection.

“Google Cloud’s AML AI has significantly improved HSBC’s AML detection capability. Google’s models are already demonstrating the tremendous potential of machine learning to transform anti-financial crime efforts in the industry at large,” said Jennifer Calvery, group head of financial crime risk and compliance at HSBC.

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“By enhancing our customer monitoring framework with Google Cloud’s sophisticated AI-based product, we have been able to improve the precision of our financial crime detection and reduce alert volumes meaning less investigation time is spent chasing false leads. We have also reduced the processing time required to analyze billions of transactions across millions of accounts from several weeks to a few days,” Calvery continued.

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