How can we utilize technology to tackle Financial crimes?

Financial crime has been a major issue around the world for decades. Let’s see, how can we utilize technology to tackle financial crimes?

We all know, according to the recent study, the cost of global financial crime is to be around $180.9 billion.

On the other hand, money laundering, corporate fraud, identity theft, bribery and corruption have been on the rise.

Therefore, this requires a strict inspection of the system. 

• Firstly, the use of technology is the main method by which the authorities are currently fighting the financial crime.

• Across the world, Artificial Intelligence (AI), Machine Learning (ML) and Data Analytics are seen as the next stage of evolution of technology.

• In short, we can use AI, ML, DA to distinguish fraud transactions from real transactions.

Types of Financial Crimes

• Identity Theft
• Embezzlement
• Bankruptcy fraud
• Money laundering
• Bribery and corruption

Different ways to prevent Financial Crimes

There are several ways to prevent such financial crimes :

Artificial Intelligence

• AI automate tasks that formerly required human intervention, such as disposition of alerts. 

• Detect more risk and effectively prioritize it with sophisticated analytics techniques. 

• Provide richer context for investigations. 

• Moreover, it has the ability to quickly identify patterns of transactions, behaviors, and anomalies that allow compliance professionals to spend their time well.

• In addition to supervised learning, unsupervised learning will help banks to differentiate between typical banking behavior and potentially suspicious activity.

Financial institutions

• As we know, financial institutions are the one who collects data from customers.

• Firstly, they took the data, regulate it and they can find customers who are involved in criminalization.

• Secondly, they should improve the availability and quality of data to support real-time transaction monitoring and advanced support analytics.

• Apply advanced analytics.

Customer Bond

• We can say it takes a lot of time to establish. Because, it’s a relationship between customer and institution.

• As a result, it will have a good effect in detecting and preventing financial crimes in banks.

• This approach has been applied in many countries where banking supervision laws do not yet provide a level of discretion.

• With regular training, one can ensure their employees that they are familiar with risk identification and regulations.

Some other ways to prevent

• Through the use of big data, financial institutions gain a clear knowledge of the illicit benefits gained through activities.

• This makes it easier to share information with other organizations and authorities to reduce the flow of criminal money being looted through accounts. 

• Machine learning models can be developed to analyze customer transactions and detect changes in them.

• So, this technique can be applied to enrich existing equipment that is based on maintenance by rule engine.

• This will make it possible to detect customers with suspicious activity.

• In fact, what is lacking in traditional behavioral analysis tools is the new patterns that may emerge because criminals are usually one step ahead.

Conclusion

We have learned, what is financial crime, it’s preventive measures, how can we utilize technology to tackle Financial crimes and more.

As we know, there are many ways to prevent financial crime through technology.

If we understand financial crime, we can take necessary steps against it.

We must be careful while giving/entering our PIN or password so that it will be less harmful.

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