Skip to main content

Looking for Valuant? You are in the right place!

Valuant is now Abrigo, giving you a single source to Manage Risk and Drive Growth

Make yourself at home – we hope you enjoy your new web experience.

Looking for DiCOM? You are in the right place!

DiCOM Software is now part of Abrigo, giving you a single source to Manage Risk and Drive Growth. Make yourself at home – we hope you enjoy your new web experience.

Artificial Intelligence in BSA

January 8, 2020
Read Time: 0 min

Artificial Intelligence in BSA/AML

Artificial intelligence is one of the biggest buzzwords in the anti-money laundering (AML) community. Some BSA professionals are excited for the promise of added security around transaction monitoring and fraud, while others are worried about the lack of security it provides their jobs.

The Financial Crimes Enforcement Network (FinCEN) understands the importance of utilizing technology in AML to better prevent bad actors from profiting off their illicit gains. In December 2018, FinCEN released the Joint Statement on Innovative Efforts to Combat Money Laundering and Terrorist Financing. It outlined the importance of financial institutions to use “innovative approaches” including artificial intelligence and other new technology to enhance their AML programs.

What is artificial intelligence?

Artificial intelligence, or AI, was defined in 1956 by John McCarthy as “the science and engineering of making intelligent machines,” or the development of computer systems that can perform tasks that require human intelligence. There are several different branches of AI, but here are the two most relevant to community financial institutions:

  • Robotic Process Automation (RPA) automates repetitive queries, calculations, and the maintenance of records and transactions. Where traditional workflow automation required coded actions to interface to back end systems through APIs (application programming interfaces), RPA systems learn by ‘watching’ the user perform the task in the application’s graphical user interface (GUI) and then repeat the tasks directly through the GUI.
  • Machine learning is the ability for systems to ‘learn’ without explicit programming. It encompasses several subtypes, but the two most discussed are supervised and unsupervised machine learning:
    • Supervised machine learning is accomplished by providing a large quantity of labeled data including the input and the desired output, and letting the machine determine the appropriate functions/algorithm needed to accomplish that goal.
      • For example, if someone fed a system thousands of pictures of appropriately labeled ducks, the system would learn how to correlate the images as ‘ducks.’ To test this, the system would receive additional unlabeled images of ducks and other items. The system would apply the function(s) and return data categorized as ‘ducks’ and ‘not ducks.’
    • Unsupervised machine learning consists of providing unlabeled data and no expected outcomes and letting the system find commonalities on its own. Presented with the same unlabeled ‘test’ data in the second example above, the system should be able to categorize the ‘ducks’ vs. ‘not ducks.’ It just would not be able to label the output.
    • Natural Language Processing (NLP) imitates a human‘s ability to write and read text in a language. An early example in this field is a chatbot named ELIZA that was created in 1964. It could simulate a text conversation by rephrasing the response from the original statement using hard-coded grammar rules.
    • Natural Language Generation (NLG), an offshoot of NLP, is a technology that turns data into plain-English language. In other words, it is software that can look at your data and write a story from it.

A BSA/AML software that's customized to your institution? That's big.

learn more

AI will never replace the human element in BSA

Artificial intelligence will never replace the human element that is necessary in dealing with the Bank Secrecy Act (BSA) and AML. A BSA officer’s best tool is his/her gut instinct and that can never be replicated by a machine. By utilizing AI to strengthen your BSA program, you are empowering yourself and your team to automate portions of your job, allowing you to spend more time finding potentially suspicious activity. Computers are better at uncovering patterns than humans are, so allow AI to automate some of the more tedious parts of your job. Because you are better at looking at an alert and knowing if it should be escalated to a case because your gut tells you something is off, that is where you should be spending your valuable and limited time.

Abrigo utilizes machine learning scenarios to better detect financial crime

Abrigo's BSA/AML and fraud software, BAM+ and BAM+ Fraud, utilizes five machine learning (ML) scenarios to help institutions cut down on false positives and focus on the truly suspicious activity. Learn more about how our ML scenarios work to help better detect financial crime. 

Do you want to learn more about artificial intelligence and how it can help strengthen your BSA program? View our webinar on-demand on your time, AI, Machine Learning, and Your BSA/AML Program.

About Abrigo

Abrigo enables U.S. financial institutions to support their communities through technology that fights financial crime, grows loans and deposits, and optimizes risk. Abrigo's platform centralizes the institution's data, creates a digital user experience, ensures compliance, and delivers efficiency for scale and profitable growth.

Make Big Things Happen.