AI in the fight against money laudering

It can be challenging to find a definite answer to what Artificial intelligence is and can do. Learn more about it in this Creditro article.

Today, AI helps with everything from directions to sales, marketing, and yes – combating money laundering. What is artificial intelligence? And what role does it play in the fight against money laundering?

Artificial intelligence is a relatively new concept that has come to the surface, but it can be challenging to find a definite answer to what it is and can do.

Artificial intelligence can be explained by the fact that computers and robots can roughly do things previously thought of by humans. It could be having a conversation or playing chess.

- Or in this case, being used to fight money laundering.

How can it help businesses?

Companies within the financial sector and people who trade with others daily must carry out a KYC check on their customers. Companies and people who have to make these checks know that the time to prepare it can vary widely and often take a long time.

When this has to be done for each customer, it requires a lot of work. This has also been why many companies do not launch major surveys of customers if there are not enough staff to handle these lengthy procedures.

It is common for companies to fail to check their customers in more depth, even though the need is there. Unfortunately, this also makes companies more vulnerable to fraud, financial terror, and money laundering. Therefore, all companies must do these KYC checks by the book to avoid money laundering.

But this is also where artificial intelligence can be of great help. With artificial intelligence, these lengthy KYC checks can be done in just a few seconds.

Who is affected by money laudering? 

There is a tendency for many companies to believe that it is banks that are most often affected by money laundering and fraud. However, this is not entirely true, as many ordinary companies are also affected by fraud and money laundering.

Ordinary companies see the protection against fraud as a costly affair that requires a significant change in their system. Therefore, it is often de-prioritized. But in reality, you have to look at the loss and the extra revenue that must be brought in to cover the loss.

Suppose your company sells an item that costs DKK 100. It costs DKK 80 to produce and sell. This means you have an income of DKK 20. If you lose this item to fraud, you have lost DKK 20 in earnings. You have lost DKK 100.

This means you have to sell an additional four items to cover the production costs.

Why artificial intelligence must be involved

These effective control mechanisms should not be considered expensive for the companies. On the contrary, it should be seen as an investment that can benefit the company in the long run. This is also where artificial intelligence comes into the picture:

At Creditro Comply, we use artificial intelligence to automate and ensure that all checks and workflows are followed and that the documentation work is in place in connection with an inspection.

The Money Laundering Act can be extensive to get your head around, and KYC is a comprehensive workflow that takes a lot of manual time to prepare. It can therefore be time-saving to use a system to systematize and automate this workflow.

In the first half of 2022, Creditro conducted a survey among its more than 4,000 users about the time spent on the KYC procedure. More than 75% of users had shortened their annual time spent on KYC by more than 95%.

This happens because documentation is automatically obtained, the right questions are asked, and the controls are in place. This coincides that all users are monitored in real-time.

At Creditro, we can thereby help your company secure its future.

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