Technologies for RegTech solutions

Artificial Intelligence solutions

RegTech solutions

The Global Market Insights and Grand View Research reports show that the size of the global anti-money laundering market, within the banking, financial and insurance services sector, is more than $ 2 billion in 2021, with a CAGR of over 10 % until 2027. As confirmed by the Credit Card and Digital Payments Observatory,  the COVID 19 pandemic contributed to positively impact the market growth, due to a sharp increase in non-cash payments via the Internet, prepaid cards and mobile payments, which has created relatively new vulnerabilities in money laundering activities.

In this context, there is a growing need to guarantee an adequate for Anti – Money Laundering management through RegTech solutions

The risk of Money – Laundering phenomena, i.e. the financing of lawful activities starting from the profits deriving from illegal activities, is in fact very high. Therefore, there is a need for financial services institutions to systematically monitor financial transactions to avoid the sanctions provided by regulatory bodies. In 2019, worldwide banks payd, ad Anti-money laundering sanctions, a value of 6.2 billion dollars, according to statistics provided by Tookitaki Holding Pte. Ltd.

But what is RegTech?

RegTech is the use of AI and Big Data Analytics  to optimize regulatory management activities and make processes and operational controls more efficient. RegTech solutions include products and services to support the monitoring of AML, risk, and claims. Through Regtech platforms a financial intermediate could have a number of benefits such as:

  • Knowledge discovery from Data;
  • Process optimization;
  • Reduction of operational risks;
  • Reduction of compliance costs;
  • Scalable and sustainable solutions.

RegTech solutions for anti-money laundering

With the ability to process and analyze data in an advanced way and with the increase in big data, companies are now in a position to exploit the potential of data to the maximum, improving decision-making and obtaining the possibility of protecting themselves by respecting the rules.

For the risk manager, the use of these tools is essential so that these techniques can be applied to risk management. On the basis of these new needs and in consideration of the growing trend of RegTech, Revelis developed the “Moneying” platform.

In 2019, RegTech was the area that is growing fastest in the panorama of technological investments made by financial intermediaries.


The capabilities of Moneying technology for RegTech

What is Moneying

Moneying is a solution for Fintech in order to monitor financial transactions, in compliance with the rules against financial crimes. The platform allows the discovery and reporting of  money laundering phenomena by accessing the transaction register (traditional currencies) and blockchains (crypto-currencies). Moreover, Moneying offers AI techniques to select coalitions of subjects who make financial transactions  in fraudulent ways. Moneying will combine inductive techniques based on Machine / Deep Learning with deductive techniques based on Answer Set Programming.

The features of Moneying

Moneying allows you to verify the effectiveness of the indicators in use, through the availability of descriptive analyzes that will allow you to highlight the presence of false positives or false negatives. In addition, the AML function may have predictive analysis to identify the effects of changes to the thresholds or to the algorithms for identifying financial crimes.

Furthermore, with Moneying it is possible to apply analytics techniques on big data graphs, thus making it possible to identify groups of subjects who carry out money laundering.

The AI ​​solution allows to automate the processing of transactions, drastically reducing analysis times and enabling an objective assessment of the recycling scenarios, also optimizing the reporting phase of suspicious transactions to the FIU and eliminating problems related to the manual entry of information.

The use of text analytics techniques allows you to automate the classification of texts and the consequent instruction phase of the practices, which today require manual intervention. In this way, there will be an increase in operational efficiency and, further, the problems related to the subjective evaluation of the texts will be eliminated.

Finally, the use of cloud-ready technologies enables business scaling over time.

Moneying provides the following features:

  • profiling of operators based on their degree of risk;
  • assessment of risk indicators (Key Risk Indicators) for the identification of any recycling scenarios of individual operators;
  • community analysis, aimed at identifying the presence of coalitions, or groups of operators who carry out coordinated operations for criminal purposes (money laundering or illicit financing);
  • support for interaction with investigative bodies;
  • automatic classification of emails sent by customers, to promptly identify any appeals related to financial relationships.

Moneying’s reference customers

Moneying’s clients will be banks, insurances, and Fintechs which include retail banking, commercial banks, digital banks, wealth management institutions, among others and are required to comply with international regulations on financial crime and the fight against terrorism; these customers will be able to improve their management efficiency, in the context of:

  • compliance (AML checks);
  • customer care (intelligent management of email communications and identification of appeals);
  • of the interaction with the investigating bodies.

Artificial Intelligence techniques will allow a drastic reduction in analysis times, the elimination of subjectivity in the assessment of scenarios and the consequent saving of time and operating costs. IT companies around the world are adopting risk management approaches to discover fraudulent transactions. Reducing fraudulent transactions, in turn, helps businesses provide secure and improved services to their customers.

The difficulties solved by RegTech solutions and the advantages

For banks and Fintech it is necessary to periodically verify the effectiveness of the AML indicators used by the organization, and to fully define the alert thresholds for the detection of financial crimes. It is also necessary to have tools for identifying new criminal phenomena / behaviors not previously known.

The monitoring and analysis of big data on financial transactions involves the risk of non-recognition of money laundering phenomena, which leads to the bank’s sanction. The subjectivity of the evaluation, together with the enormous amount of information to be processed, determine frustration and uncertainty in the employees.

The staff in charge of claim management must interpret texts and this happens in a subjective manner. Furthermore, the classification of the communications received depends on the operator who carried out the processing. This introduces errors in the management of practices and delays in manual analysis, which leads to excessively long response times, in the face of the numerous requests received every day.

The advantages of RegTech solutions

The advantages of using Artificial Intelligence techniques in a banking context are related to the possibility of having automatic software agents capable of behave similarly to human operators in the performance of tasks related to compliance analysis or customer relationship management such as:

  • the identification of fraudulent phenomena;
  • understanding the requests made by users;
  • rigorous analysis of actual behavior.

All these processes will benefit from the automation guaranteed by the latest generation of IT platforms that allow for time optimization and relief of employees from the tasks of processing huge amounts of information.

Furthermore, the greater responsiveness and accuracy of the processing improves the relationship with the stakeholders of the banks, such as financial authorities and customers. All this translates into:

  • operational benefits for employees;
  • improvement of the reliability rank with the financial authorities;
  • increase in brand reputation towards customers.

Specifically, employees will be relieved of the tasks of controlling large amounts of transactions, allowing them a higher level governance of reporting processes to financial authorities. Furthermore, the communications analysis function will allow the automatic and objective reading of the thousands of emails that are delivered daily to the bank complaints office, allowing employees to focus only on the communications that are actually relevant, thus increasing productivity and effectiveness. of work.

Now it is easy to understand how the advantages of RegTech technologies are different and today indispensable to obtain for banks and Fintechs that want to operate according to the rules established for their country.