Fighting money laundering helps prevent often hidden and global crimes like human and drug trafficking and tax evasion. The fight is complex. It necessitates monitoring customer transactions and assessing risk around the clock, and around the world. This global battlefield requires collecting a massive amount of data — 1 to 2 terabytes of data per year per country — in various formats, from a multitude of source systems in different countries.
At Scotiabank, technology powers the anti-money laundering (AML) process from start to finish, making it faster, cheaper and more effective. Here are just three ways that Scotiabank is keeping up with emerging but proven technologies in its fight against financial crime.
Natural Language Processing (NLP)
NLP is a type of artificial intelligence that understands text and spoken words much like humans can, and enables the Bank to understand and monitor suspicious transactions in real time as the data moves around the world. “This has resulted in fewer false positives and more efficient data matching,” said Rian Mitra, Vice President, Core AML Development at Scotiabank. “In the last year alone, the team that investigates these transactions saw an increase in accuracy of over 33%.”
Identification Verification
Using identification verification technology, the Bank has digitized face-to-face transactions so that, for example, customers can authenticate themselves online for onboarding and banking transactions. This way, information can be collected with greater accuracy and efficiency for analysis. “Identification verification technology is being used across 60% of digital channels in Canada, and is being considered for Colombia and Peru,” said Mitra.
API (Application Program Interfaces) and Data Standardization
With APIs and data standardization, the Bank enables different systems around the world to speak to each other and share data so that information can be gathered, standardized and consumed. “Whether that’s to improve our algorithms for risk assessments or to very quickly sort through critical transactions, it’s what we call creating a common global data model,” said Mitra. “We make it so that the search algorithms can recognize a piece of data as, for example, a chequing account within a broad string of data.”
Before this, each country had a unique and lengthy process for collecting, standardizing and analyzing data. “It took between five and 10 people to support the process per country. Now it takes two people – these types of changes improve our efficiency and effectiveness while reducing costs,” said Mitra.
As the financial crime landscape continually morphs, so must Scotiabank’s approach to combating criminals. “From a technology standpoint, we’re fighting financial crime by many methods,” said Demetria Ruggiero-Barbera, Senior Vice President & Global Head of Engineering, Financial Crimes and Operational Risk at Scotiabank. “We’re deploying innovative ways, skills, processes and technology at every point while creating common global re-usable services to help improve the employee and customer experience and drive down cost.”
There’s an undeniable connection between protecting the Bank while innovating at the same time, said Stuart Davis, Executive Vice President, Financial Crimes Risk Management & Group Chief AML Officer at Scotiabank. “AML is more than just a regulatory requirement. It entails good corporate citizenship. The technology we’re employing is ensuring we’re working smarter to detect and report financial crimes.”
Fighting financial crime is a collective challenge and opportunity that brings together financial crime risk partners, operations, governance and regulators. “All of these methods aren’t done by invoking technology alone. Coming together to win as a team drives innovation while also driving the transparency and interpretability of the process, model or solution,” said Ruggiero-Barbera.
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