HSBC Implements AI for Tracking Money Laundering

HSBC Implements AI for Tracking Money Laundering
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HSBC recently began utilizing artificial intelligence (AI) technology from Quantexa, a big-data startup, to track and tackle money laundering.

The banking giant revealed its plans to incorporate the startup’s technology into its infrastructure by the close of the year.

By using the software from Quantexa, HSBC will evaluate billions of data records from both internal and external sources in identifying potential money laundering and in satisfying regulatory standards.

The AI software technology from Quantexa collects internal, publicly-existing and transactional data from a client’s broader network in an attempt to spot money laundering signs.

Having undertaken the initial trials in 2017, HSBC is expected to work with the UK-based startup in deploying its technology across all the bank’s global operations to help in detecting potentially illegal activity, especially in its broader context.

Ray O’Brien, HSBC’s global risk chief operating officer, said that in response to the bank’s recent investment in Quantexa, it was looking forward to collaborating with the startup to boost its intelligence-based approach to financial crime risk management.

In 2012, HSBC paid a $1.9 billion fine for aiding criminals to launder money in Mexico.

Aside from the payout, the global bank agreed to a five-year deferred prosecution agreement with the US DoJ (department of justice).

It promised to correct compliance inefficiencies. Since then, HSBC has spent over $1 billion in trying to tighten its compliance procedures, for instance, through participating in an investing round at the beginning of 2017 whereby Quantexa raised $3.3 million.

Both HSBC and Albion Ventures led the financing exercise.

Vishal Marria, the company’s CEO, was honored to be collaborating with HSBC in its endeavor to fight money laundering.

He also said that Quantexa’s market-leading technologies would be helping the bank in joining the dots of all its data in an attempt to deliver a better understanding of their transactions and customers globally.

Mindtree’s head of AI practice, Suman Nambiar, asserted that by empowering artificial intelligence(AI) technology, HSBC would not only effectively be in compliance with regulations but would also free its human workforce in a bid to deal with more strategic activities.

He added that successfully complying with strict regulations and combating money laundering surpasses human capabilities citing the growth of data sets and the complexity of financial transactions.

Other factors include the integration problems involved with monitoring systems and the disparity of transaction data systems.

Suman Nambiar went ahead to say that machine learning and artificial intelligence have an essential role to play, particularly in dealing with such hurdles and keeping up with the rapidly changing banking environment.

He also acknowledged new technologies such as AI for allowing financial institutions to shift from traditional business models to more dynamically adaptive and predictive ones.

What’s more, these new models are suitable for real-time, client-centric detection of anomalies, which is what banking entities like HSBC are looking for to solve their issues.

To close his remarks, Suman emphasized his point by saying that other banks needed to embrace the new technological advancements in a bid to gain a competitive advantage over their counterparts.

Source Computing

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