New Oracle AI-powered cloud service helps banks mitigate anti-money-laundering risks

With $5.05 trillion expected to be laundered this year alone, banks are struggling to keep up with the cost and complexity of compliance. To help address this massive challenge, Oracle Financial Services today introduced Oracle Financial Services Compliance Agent. The AI-powered cloud service enables banks to run inexpensive, hypothetical scenario testing to adjust thresholds and controls to sort through transactions, identify nefarious activity, and meet compliance requirements more effectively.

“Banking in India continues to grow,” said, Rajaram Vadapandeshwara, vice-president, FSGIU Analytics development, Oracle Financial Services. “As of 2022, more than 80% of the Indian population had a bank account in comparison to 17% in 2009. With this extensive growth comes the threat of more illicit banking activities. AI and machine learning have great potential to improve the effectiveness of anti-money laundering and other financial crime detection programs to deliver even greater efficiencies in the transactional modelling process. With Oracle Financial Services Compliance Agent we can help enable banks to prevent potential money laundering opportunities more quickly and economically.”

Part of Oracle Financial Services portfolio of anti-money laundering (AML) and financial crime and compliance solutions, Compliance Agent is designed to help financial institutions holistically assess and optimise the performance of their transaction monitoring systems (TMS) more cost-effectively and gather empirical evidence to support business decisions. With the service, banks can:

Assess risk profile of new banking products

Compliance Agent can objectively evaluate and measure the AML risk profile of new products and evaluate controls to mitigate these risks cost-effectively, thereby reducing the time to market for new products. The solution also provides the statistical basis needed to reduce conservative bias in deciding AML controls for new products. This is a win for banks that are under pressure to introduce innovative products but must do so without exposing the bank to new avenues of money laundering and incurring extensive and costly assessments.

Proactively assess and mitigate risks from high-risk typologies

Compliance Agent can also proactively assess and diminish risks from high-risk typologies, such as human trafficking. For example, based on the results of an experiment, a user can tune the controls and make the TMS more capable of catching these types of suspicious transaction patterns. Fortifying the TMS for potential high-risk typology behaviours keeps banks proactively prepared for the unknown potential attacks specific to those typologies. This is critical in helping banks stay in good standing with regulators and customers.

Make cheaper, faster, and evidence-supported decisions for risk modelling
In addition, Compliance Agent helps compliance teams provide evidence to model risk teams and regulators so that they have the best controls in place for monitoring transactions efficiently and updating those controls to fight the continuously advancing trends in money laundering tactics. Banks can use Oracle’s AI-powered analytics to make evidence-based compliance decisions faster and cheaper. The “what-if” capabilities of Compliance Agent allow users to evaluate multiple options and help them select the most suitable and optimal option. It can also provide insights about controls, such as transaction limits for banking products, for stronger transaction monitoring.