In 2023, $3.1 trillion in money laundering and illicit funds flowed through the global financial system. The need to follow the money, uncover hidden connections and provide actionable intelligence to law enforcement is acute.
For many financial institutions, unravelling intricate and complicated illicit activity is addressed through complex investigations — yet these efforts are hindered by considerable challenges across the industry.
In this insightful blog we explore factors that impede complex financial crime investigations and how artificial intelligence (AI) and automation can bolster their efficiency and effectiveness.
Complex Financial Crime Investigations: Industry Challenges
Complex financial crime investigations involve many stakeholders such as investigators, financial institutions and law enforcement, often span multiple jurisdictions and demand a high level of expertise, time and resources. Failure to conduct these investigations effectively can result in unidentified illicit activity, serious reputational risk to your institution and wasted effort from your most senior and skilled personnel.
Despite this, complex investigation teams often face daunting workflows, manual processes, disparate, unresolved data and an incomplete view of customer activity — significantly delaying investigations and preventing investigators from quickly making decisions and providing actionable intelligence to law enforcement.
Inefficient Workflows
Investigation teams are challenged by inefficient workflows across siloed, disparate systems and multiple data sources — resulting in a limited view of activity, slower decision-making and increased operational costs. With a massive amount of data from multiple locations, investigators are often left to manually piece together a complete view of their customers’ activity. Compiling, managing and manipulating data to prepare to start an investigation can often take a significant amount of time, slowing down investigations and preventing investigators from quickly making decisions and providing actionable intelligence to law enforcement.
Unresolved Entities
Complex data pipelines create large amounts of data to compile and analyze for money laundering and fraud investigations, and variations in individual and business customer names may result in a single entity appearing as multiple entities within your demographic information. Without an automated process to resolve entities and transactions together from different data sources, investigators are often left to manually piece together a complete view of their customers activity.
A Fragmented View of Customer Activity and Relationships
Data is received from many different data sources and manipulated in many different programs and forms, such as spreadsheets, graphic design programs, word processors and shared drives. Without the appropriate tools to visualize data, investigations are tedious and time consuming — allowing suspicious activity to go unnoticed.
AI and Automation: A Step Change in Efficiency and Effectiveness
Purpose-built anti-financial crime technology, including automation and AI, can provide a step change in efficiency and effectiveness for complex financial crime investigations, with use cases that enable a complete view of customer activity, a streamlined approach to piecing together massive amounts of data and more. Below are some examples of how AI and automated solutions can help.
- Data-Driven Solutions
Data used in analysis, including third-party, open-source and consortium-based data, can be made available directly in your solution, at your investigators’ fingertips. - Automated Entity Resolution
Automating the resolution of multiple representations of a customer within an institution to significantly reduce manual effort required of investigators.
- Counterparty Data & Non-Customer Profiles
Using information extracted from rich data across a cloud environment to resolve details about non-customer entities to form counterparty profiles, helping investigators expedite reviews and better assess the risk associated with activity that goes beyond your institution’s view.
- Link Analysis and Visualization
Visual investigation tools can use rich data insights to focus investigative efforts, provide data-driven intelligence into customer activity and relationships, and make connections across networks that might otherwise be missed.
- Seamless Case Management & Suspicious Activity Reporting
Fully integrated case management can provide a centralized system — from investigation and documentation of cases to automatic SAR filing.
Strengthening Complex Financial Crime Investigations
To avoid delaying investigations with manual processes, increase the effectiveness and efficiency of complex financial crime investigations, and provide quality, actionable intelligence to law enforcement, institutions should consider a holistic complex investigations solution.
Nasdaq Verafin’s Intelligent Investigation Platform is specifically designed for anti-financial crime teams. Our data-driven Financial Crime Management solution dramatically improves the efficiency of AML/CFT operations with a single, consolidated solution for seamless, end-to-end investigations with visualization tools and integrated case management.
