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Customer & Third Party Risk

Can AI help compliance teams work smarter?

Photography: Nigel Treblin
Photography: Nigel Treblin

As cognitive computing continues to make great strides, how can compliance professionals harness the power of machine learning and artificial intelligence (AI) to help solve the regulatory challenges they encounter on a daily basis?

Cognitive computing encompasses a range of different technologies, two of which include machine learning — where computers analyze volumes of data and produce recommendations — and artificial intelligence (AI), which involves the additional aspect of relying on the machine to apply ‘reason’.

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Teaching a machine how to think like a person, however, is not without many pitfalls.

For example, algorithms can be used to analyze all available information when making a decision, but cannot efficiently take ethical or humanitarian considerations into account.

Unlocking the value in content

Such pitfalls aside, both machine learning and AI are already used to help compliance professionals make sense of the vast volumes of data they encounter every day, including regulatory changes and updates, breaking news and KYC-related documentation received from clients.

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Some of the ways that machine learning and/or AI can be applied in this space include:

  • Intelligent tagging

Intelligent tagging links people, places, facts and events across millions of documents at speed and can also attach scores to indicate relative importance.

The result is enriched content that can be searched with ease and precision.

  • Information de-duplication

Compliance professionals often need to trawl through duplicate or near duplicate content when researching a topic or news story.

De-duplication technology identifies and clusters duplicate or similar content, so that users can cut through the noise and reduce the amount of content they need to review to make informed decisions.

  • Event and name grouping

Another challenge often encountered is how to accurately identify content related to a specific entity or theme.

Event based de-duplication detection technology can separate content into event clusters, enabling users to focus only on the combination of the entity and event they are interested in.

Once again, this removes much of the noise factor.

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Behavioral analytics and identity

 AI can be used for much more than unlocking the value in content.

For compliance professionals, rigorous KYC processes are imperative, as global regulations require client identity to be established and monitored beyond any doubt.

Although technology can help to establish identity, criminals can use the same technology to create fake identities, meaning that compliance teams need to stay a step ahead.

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AI-enabled behavioral analytics are already helping to verify identity by pinpointing instances where irregular behavior occurs.

For example, technology can be used to analyze how an individual typically holds their smartphone and compare any suspected unusual activity to typical activity.

Credit card companies also use behavioral analytics to flag unusual purchases by comparing these to normal buying patterns.

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Such advances in technology and the application of AI mean that we now have the building blocks needed to assess risk intelligently.

Correctly applied, this technology can be harnessed to reduce compliance burdens, lower costs and free compliance teams to focus on areas of greater value-add within their organizations.

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