How can AI-led automation transform financial crime operations?

How can AI-led automation transform financial crime operations

When you look at your financial crime operations, does the following sound familiar?

  • Agents working from multiple systems
  • Errors leading to alerted transactions being allowed through
  • Delays in chasing funds, leading to increased losses
  • Complaints causing issues and increased costs
  • Limiting the volume of alerts that can be created, missing frauds
  • Need to reduce costs and support customer growth

In this blog, you’ll learn about the external and internal factors that are causing and exacerbating the above factors, and how to turn this around.

External environment

There are several external environmental challenges impacting FI’s ability to manage financial crime for fraud and AML. First, transaction volumes are increasing (unless at the branch counter) at pace. Coupled with new channels, such as Open Banking, chatbots and Amazon Alexa or Google Home, bringing new fraud vectors further increases the volume of transactions and alerts to manage. The continuing rise in digital technology features, especially mobile adoption, results in even more volume.

The increasing complexity of fraud cases, such as Authorised Push Payment fraud (APP), takes more time to deal with than traditional ACTO, both to investigate and help the customer with the issues caused. There are more cross-channel attacks that increase losses and involve longer investigation and root cause analysis.

It isn’t unusual to see transaction volumes doubling and alerts up circa 50 percent over the last three years. This means the FTE required is increasing, even before more customers are onboarded. It is therefore unsurprising that greater demands are placed on financial crime teams. It’s important to understand how this translates into operational areas.

Internal environment

Many FIs still have legacy systems and often need staff to check multiple systems, particularly on complex cases, which takes up valuable time. This also means your best investigators are doing lots of data collation and often manual keying, which is costly and can lead to errors.

In terms of prioritisation of cases and workflow, processes are often manual or semi-manual – this means parts of a process may be missed, or the wrong case worked first. The errors this inevitably causes can lead to increased losses, e.g. a catch and release fraud, additional liabilities, or breaking AML legislation.

These issues also limit the volume of alerts that can be worked for a given number of investigators, which ultimately limits overall fraud prevention levels. Further, this can increase attrition as mundane repetitive work is not interesting, further exacerbating the problems.

Finally, all of these issues increase complaints, drives up costs and negatively impacting the company’s Net Promoter Score (NPS).

This process is not sustainable and creates a vicious cycle unless we change the status quo. The common misconception is to work people harder, but the key is to work the systems harder to enable people to succeed.

It begins with allowing your employees to do what they are best at: talking to other people and focusing their time on complex, more impactful investigations. This is particularly important for APP frauds, given both the complexity and life-changing implications for the customer. Do you really want staff flicking between lots of screens when trying to have these delicate conversations?

Can we move from this vicious circle to a virtuous circle?

Intelligent automation

With a single case manager, employees can obtain all the information they need in one holistic view, allowing them to quickly understand the full story. This can significantly transform your fraud operations. Financial crime and compliance domain-specific embedded automation also further supercharges an efficient workflow. No longer are employees spending time on repetitive tasks; they now can focus on analysis and more valuable activities.

Furthermore, imagine a platform that provides analytics, reporting and dashboards to drive decision making, such as staffing levels at different times of the day or which alerts to work first. The platform could also provide refunds and close cases down at the touch of a button.

So how do you get there?

This is a journey, not a sprint. It starts with not just one change, but multiple, small changes. It starts with building a roadmap of short-, medium- and long-term developments.

Start small with the easy wins such as providing staff with policy rule descriptions, and the benefits can pay for the longer-term investments.

Plan what you want to do based on key organisation challenges, such as staff volumes and costs, customer impacts or new product developments.

Review processes before starting to understand what adds value, what should be automated and what should be discarded.

Requirements for configuration and data integration

Make automation part of a full operations programme with a clear ROI. Remember, this requires a culture change, too.

By using automation, we can transform financial crime operations. Agents can spend their time talking to the customer to get them back up and running and learn how to protect themselves going forward. As basic tasks are automated, errors and complaints are reduced and time to resolve each case is decreased, increasing overall efficiency.

Staff are happier and more engaged with customers, and they can work more alerts per day. This leads to increased fraud prevention and high customer service ratings. When victims of fraud have a good experience from a bank resolving their problem, they often tell their friends, boosting your firm’s NPS and providing long-term benefits.


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