Webinar panelists agree on need for innovation, regulatory acceptance
Officials from the U.S. Secret Service and the U.S. Department of the Treasury joined Symphony AyasdiAI CEO Simon Moss as panelists to discuss technological advances in financial crime detection. The May 26 webinar, sponsored by ATARC in partnership with SymphonyAI, focused on the explosion of cybercrime in recent years and how it has affected financial crime investigation.
All three panelists agreed that both law enforcement and bank investigators need to keep better pace with the sophistication of modern financial criminals.
“We collectively as a system should be proactively ahead of financial criminals with innovative new ideas to discover malfeasance behaviors,” said Mr. Moss. “And we have an opportunity with AI and machine learning.”
Roy Dotson, Jr., Secret Service Acting Special Agent in Charge, Pandemic Fraud Recovery Coordinator, agreed with Mr. Moss’s assessment.
“I hate to say it, but federal law enforcement and law enforcement in general is usually behind the curve a little always,” he said. “And our criminals are more than willing to adopt new technologies and money laundering tools way before we kind of get the message.”
Mr. Moss stressed the need for regulatory acceptance of proof in the use of higher-order technologies to detect and prevent financial crime. At the top of the list, he said, is Artificial Intelligence, which is able to detect behaviors that are deliberately trying to look the same as everybody else’s behaviors. He described the investigatory process as not looking for a needle in a haystack, but rather looking for a needle in a stack of needles, and that AI is the solution to precision discovery.
The AyasdiAI CEO also touched upon two other higher-order technologies needed to help rout out bad actors: Robotic Process Automation (RPA) to replace monotonous hard data acquisition and assimilation processes and create consistency in how the investigation is run; and stronger emphasis on KYC technology, including facial recognition.
“Simon hit on the three big AML areas where AI can have a huge impact,” said Jim Vivenzio, U.S. Department of the Treasury Director for Bank Secrecy Act/Anti-Money Laundering Policy. Mr. Vivenzio pointed out that the OCC issued an interpretive letter permitting national banks to use advanced technologies and automated processes to file structuring SARS.
“It basically took the entire structuring SAR process out of the hands of the SAR investigators and fully automated them…and this had a huge impact,” he said.
Mr. Moss was quick to praise the OCC action, saying that he’s glad the relationship has changed.
“The regulators are now saying we’re not going to penalize you if you adopt new technologies because we understand the inefficiency of the old technologies, so go ahead and discover it. And that has been incredibly important for the adoption and at least the trial of these technologies.”
Secret Service Agent Dotson weighed in on the importance of AI in his agency’s investigative field work. He said the data flowing in on even the smallest cybercrime is overwhelming.
“We’re talking billions of records that we have to try to cipher through but can’t,” said. “And thanks to the advancements of AI and Machine Learning, we’re able to develop some very good criminal leads that we’ll be able to follow up that normally law enforcement just wouldn’t have the capabilities of doing.”
Mr. Vivenzio outlined the issues on which the OCC is focusing as they prepare guidance to banks in their use of artificial intelligence. One of those issues, he said, is how data integrity has an impact on AI. His office is concerned about inherent bias that he says exists in some of the models.
Mr. Moss countered that bias isn’t in the models but rather in the data.
“And that’s where all these innovations in unsupervised AI are standing out,” he said. “Most banks are in a fairly good position in the structure of the data they have. What they don’t have is a good engine to interpret the criminality within that data.”
All three panelists agreed that the time to drive responsible innovation is now.
“We as a system are threatened by our advisories,” said the AyasdiAI CEO. “Not as an individual bank, not as an individual regulator, not as a fintech. The system is attacked, and we need to work out a way in which we can work together better, how we can share information better, how we can connect things together.”
Mr. Moss concluded, “We need to drive more parallel runs. We need to be able to see the delta between what has been done and what can be achieved. And our banks need to build a responsible roadmap with their regulators that says this is how we can catch up with our adversaries. Because if we can’t catch them now in fiat, we’ve got a really, really difficult time ahead of us in this new crypto market with its new vernacular, its new dynamism and its new opacity.”
Access the entire webinar here.
About Symphony AyasdiAI
Symphony AyasdiAI, a SymphonyAI business, empowers banks and financial institutions with a complete picture of customer, third party and user behavior to discover crime, risk and competitive opportunity through unparalleled, predictive insight. Using a uniquely powerful combination of artificial intelligence and machine learning, Symphony AyasdiAI customers dramatically reduce the time to achieve genuine transparency, with full explainability. The Sensa platform leverages unique combinations of time series and leading analytical innovations to give organizations absolute fidelity for competitive discovery, risk detection and efficiency optimization. Learn more at www.ayasdi.com, LinkedIn, or Twitter.
SymphonyAI is building the leading enterprise AI SaaS company for digital transformation across the most critical and resilient growth industries, including retail, consumer packaged goods, financial services, manufacturing, media and IT service management. SymphonyAI businesses have many leading enterprises as clients in each of these industries. Since its founding in 2017, SymphonyAI has grown rapidly, approaching 2,000 talented leaders, data scientists, and other professionals. SymphonyAI is an SAIGroup company, backed by a $1 billion commitment from successful entrepreneur and philanthropist Dr. Romesh Wadhwani.