Regulatory scrutiny and growing cost pressures are severely impacting Know Your Customer (KYC) and Anti-Money Laundering (AML) operations of financial institutions. Discussions with several banks have revealed they are finding it hard to keep track of constantly evolving regulations, interpret and implement global regulatory changes at a local operational level, collect and refresh information from numerous sources and systems across different businesses and jurisdictions, manage and analyze growing volumes of structured and unstructured data to identify patterns, networks, and beneficial owners, while containing costs amidst a difficult economic environment.
Banks so far have looked to address the challenges by hiring more staff, as traditional rule-based KYC-AML technology necessitates significant dependence on manual efforts. But too much reliance on manual efforts can make the process costly, error prone, and inefficient. Banks therefore need to think out of the box and consider new and innovative solutions to alleviate operational and cost pressures.
Adoption of Artificial Intelligence-enabled solutions could be one way to mitigate current challenges, increase efficiency, and reduce costs, as they can not only automate significant parts of operations but also offer superior insights through advanced capabilities for analyzing structured and unstructured data. In a new report, Celent discusses several challenges plaguing financial institutions’ Know Your Customer (KYC) and Anti-Money Laundering (AML) operations, and proposes how Artificial Intelligence (AI) enabled solutions can help in addressing them. This report was commissioned by NextAngles, an Mphasis Fintech venture, while Celent kept full editorial control. The report is available for download here.