Accuity has launched a new AI-powered account screening capability to increase the level of accuracy of screening matches during the know your customer process.
Accuity is a provider of risk management and compliance software. Among other things, it helps banks and companies screen and identify customers, partners and counterparties who could be engaged in illicit financial activities, associated with sanctioned regions, or are politically exposed persons.
Current systems to alert parties to these issues typically produce a large number of so-called “false positives” – red flags that turn out to be harmless. This, Accuity says, is a “significant burden” for organisations with large-scale compliance operations that rely heavily on human operators to manually review potential risks.
“Existing matching technology compares customer data to the entities listed on regulatory watchlists, but until now, has not been sophisticated enough to eliminate the abundance of ‘false positive’ results produced with the necessary level of accuracy,” Accuity says in a statement. “Manually assessing alerts to determine quality, potential risk and whether further investigation is required, has been a significant drain on compliance resources and a contributor to the rising costs of compliance across the industry.”
Meanwhile, Firco Automated Alert Reduction – the name of Accuity’s new capability – applies AI techniques to the hundreds of thousands of potential matches produced by its financial crime screening system.
The solution’s patented scoring methodology calculates the probability that a match is correct and evaluates how material the risk is to the business. Based on an organisation’s individual risk appetite and compliance policy, the capability then flags the most relevant hits for immediate attention.
Screening results are continuously fed back into the screening cycle, allowing the model to adapt and become more intelligent as it gathers information.
The solution also records an electronic audit trail so screening results and the decision-making process can be shared easily with regulators.
The launch of Firco Automated Alert Reduction is a result of Accuity’s acquisition of Safe Banking Systems (SBS) in July 2018.
“Sifting through screening matches to detect the true risks can be like trying to find a needle in a haystack,” says Sophie Lagouanelle, vice-president of financial crime screening at Accuity. “Not only does our solution considerably reduce the size of that haystack to expose risks with unparalleled precision, but it also intelligently prioritises those risks according to the organisation’s compliance policy, so operators can be far more methodical in their approach to reviewing hits.”
The use of AI to detect financial crime could come with huge savings for banks. FortyTwo Data, an anti-money laundering technology company, has previously calculated that banks are squandering £2.7bn a year on chasing false leads – costs that could be saved by using new technologies like machine learning and big data. The company found that on average 55% of false positives can be eradicated with modern regtech solutions.