Fight against fraud: it is no longer enough to automatically check all transactions

With the development of technology, financial crimes will become more and more sophisticated, which also presents service providers with new tasks. It is not possible to fight to reduce crime with well-proven methods, more and more complex models are needed. Machine learning and artificial intelligence can play a prominent role in these models, speeding up data processing. In addition to technology, other factors also act in the direction of change: regulations related to financial abuse are constantly being tightened, and the financial services market is also constantly changing with the appearance of new, faster, cross-border actors.

Today, it is not enough just to check transactions

Due to changes in the industry, it is no longer enough for service providers to use a traditional monitoring approach; they have to use more sophisticated models than before. To keep pace with new and evolving financial threats, they need to connect internal and external information sources, combine customer due diligence with monitoring, and ensure that the control system can respond quickly to changes in risk.

“The previous simple model had several disadvantages. An example is the high rate of false (false positive) alarms, which often exceeded 90 percent. The implementation, testing and operation of the solutions were particularly expensive. An additional problem in manual control was the high risk of human errors, and difficulties were encountered in connecting the expected and actual behavior of customers”

– said Csaba Horváth, an expert in Deloitte’s Financial Crimes team.

In other words, service providers incurred significant costs in order to comply with the stricter regulations, but compared to their efforts, they were only able to show weaker results in terms of crime prevention.
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