The Record - Issue 16, Spring 2020

68 www. t e c h n o l o g y r e c o r d . c om F E ATUR E P roviding seamless, omnichannel customer experiences is essential for competitive financial business. But the digital world also brings a multi-layered challenge: safeguard- ing the business and its customers from relent- less attempts at financial crime. Regulators now require banks to absorb the costs of fraud for real-time transactions and pro- cesses, so the pressure is on to identify, manage and mitigate risk more efficiently. The prob- lem is, many of the rules-based fraud preven- tion processes in place today are yielding over 90 per cent false positives, requiring legions of investigators to spend time manually reviewing alerts. Tightening the model to reduce the num- ber of false positives would also increase the like- lihood of missing real fraudulent activity. Cloud and artificial intelligence (AI) tech- nology are the key to resolving that challenge. According to McKinsey & Co, banks that invest in data-aggregation, process automation and advanced statistical modelling using machine learning and AI can decrease compliance-error rates from over 30 per cent to less than 5 per cent and cut false-positive alerts to below 50 per cent. Financial firms recognise this opportunity. “In the fast-changing, tech-driven world banks now live in, they recognise that technology can play a role in helping them meet both their cus- tomers’ expectations and challenging regulatory requirements,” writes Bill Borden, corporate vice president of worldwide financial services at Microsoft in an industry blog. “The industry Cloud and AI technologies are helping banks rise to the increasingly complex challenges of financial crime BY J ACQU I GR I F F I THS Fighting financial crime