The FFE and sponsor, the Regulatory DataCorp (RDC), have just released the FFE’s latest white paper on FinTechs’ use of Artificial Intelligence (AI).
In a survey of 18 members, the FFE found that 61% are currently either in the process of developing in house AI solutions or reviewing third party options for their fraud or AML programmes. 33% of surveyed FinTechs currently employ AI solutions developed in-house against 11% that use third party AI solutions.
Cost and data deficiencies, followed by human resources, were reported as the main barriers in implementing AI solutions by FinTechs. The lack of sufficient knowledge or understanding also appeared prominently as one of the top risks highlighted by respondents.
FinTechs, who had managed to overcome the barriers and challenges, reported a number of benefits including better accuracy and fewer false positives, faster turnaround on onboarding and some improvements in fraud detection.
In the meantime, research and feedback from members suggests that the best approach to introducing AI tools appears to be to deploy them alongside traditional systems: monitor and audit both old and new tools until you are satisfied, and then you are able to rely on the new tool.
Clearly as outlined there are risks and challenges with AI, but anything that enhances the ability for the sector to combat financial crime should be explored for the overall positive benefits it will bring to the companies involved and the people it affects. As highlighted by the survey results, FinTechs are not only well placed but are actively seeking opportunities to integrate AI to enhance their AML framework.