Johannesburg, 29 Jul 2022
South Africa’s possible greylisting by the international Financial Action Task Force (FATF) next year could result in South Africa being excluded from the global financial system, with significant impacts across all sectors. The greylisting risk is therefore expected to be a key concern as financial stakeholders gather for the TCI Anti-Money Laundering and Financial Crime conference in Johannesburg next month.
This is according to event sponsors Bateleur Software, msg Rethink Compliance and FICO, which partner to help southern African customers address the growing risk and impacts of money laundering and financial crime.
Speaking ahead of the Anti-Money Laundering and Financial Crime conference, Juergen Krieg, Managing Shareholder at msg Rethink Compliance, says some countries are losing the battle against financial crime and money laundering due to outdated systems and processes, and insufficient data. “Rules based anti-money laundering (AML) and anti-financial crime (AFC) is no longer enough as criminals become more sophisticated. AML and AFC solutions need to become smarter, harnessing artificial intelligence (AI) and global data to be more effective,” he says. “However, because up to 70%-80% of AI projects fail, we need to ensure that projects in this sector don’t fail and add significant value. This depends on the right algorithms combined with the right data, finding the right outputs and bringing them into existing rule-based systems to accurately prioritise and flag transactions and behaviours.”
Lizette Sander, Product Manager at Bateleur Software, says AI is an important part of a holistic, enterprise-wide approach to compliance, anti-money laundering and fraud prevention. “As far back as 2018, the IDC MarketScape: Worldwide Anti-Money Laundering Solutions in Financial Services 2018 Vendor Assessment found that AI and machine learning were becoming increasingly important to AML and AFC efficacy,” she says.
The insurance and financial sectors are stepping up their use of AI in AML and AFC, however, wider adoption of AI in AML and AFC has been hampered by factors such as perceived high costs and acceptance by regulators, they say.
Krieg says change can be slow on the part of regulators. In South Africa, the regulator has been looking to bring AI mechanisms into the AML and AFC world. “We engage with regulators to assist. We can’t sell smarter technology by only talking to users, we have to talk to regimes; therefore we have ex-FIU skills in-house who talk to FIUs about challenges and how to operationalise AI to address them. In South Africa, we have been engaging with regulators and other governmental bodies on how to translate strategy into executable tasks. This is where we see ourselves – as consultants and facilitators helping to transform strategy into actions and tasks.”
Sander says: “All the technology and the regulators are moving in the direction of AI. We will participate in the TCI Anti-Money Laundering and Financial Crime conference as part of our ongoing campaign to ensure that everyone in the compliance space has the opportunity to discover the advances available in the market.”
Bateleur partners with FICO and msg Rethink Compliance to bring the best of local and global expertise and solutions to southern Africa, to help customers prevent and detect fraud and money laundering. FICO (formerly known as FICO TONBELLER) is a leader in AML and know-your-customer (KYC) solutions, using AI and machine learning to improve efficacy. German-based msg Rethink Compliance offers consulting and advice on the digital transformation of the Financial Crime Compliance Office and processes, with global insight and consulting experience spanning over 1 200 financial institutions in over 100 countries. Bateleur Software is a trusted local partner supporting and implementing FICO solutions for governance, risk and compliance in South Africa.
Share