Nasdaq announced on Wednesday about the launch of the cloud-deployed Nasdaq Automated Investigator for AML. It is the first automated solution for investigating anti-money laundering (AML) for commercial and retail banks and other financial institutions.
The company designed and built Nasdaq Automated Investigator for AML in partnership with UK-based Caspian. This technology expands Nasdaq’s already widespread efforts in fighting financial crime while simultaneously promoting market integrity in the world’s capital markets.
Valerie Bannert-Thurner, the SVP and Head of Sell-side and Buy-side Solutions in Nasdaq spoke about the new project. According to her, the financial industry is making a structural shift to more intelligent technologies and adaptive analytics based on more diverse data pools to investigate financial crime.
Nasdaq is both a technology provider and a market operator. And it commits to fight financial crime, thus aiding the capital market ecosystem to stay healthy and safe.
Bannert-Thurner also stated that through the years of expertise they have gained as an industry leader in trade surveillance, they are both moving beyond their alerting capabilities to the investigation and expanding their solutions to help eradicate illegal money transactions.
The Automated Investigations Management space is an underserviced area of financial crime operations. As a result, it presents a significant gap in the investigations management process for banks.
Criminals use many techniques to launder money, causing banks to cast a wide net to catch them. However, a wide scope of surveillance means AML Transaction Monitoring systems could trigger more than 200,000 to 300,000 alerts a month in extreme cases.
What are banks doing to curb criminal schemes?
Many banks have already tightened the parameters within their AMLTM systems or added more scoring mechanisms, thus reducing alerts. But when banks tune their models too tightly, they face the risk of missing criminal activity. In addition, they expose themselves to regulatory sanctions. Furthermore, those firms that have tightened their parameters can still experience 20,000 to 25,000 alerts in a month.
So, Nasdaq decided to help with this problem. The Nasdaq Automated Investigator ingests alert data from any transaction monitoring system. After this it then collates all of the necessary data required for analysis. Afterward, it analyzes the data, and replicates complex human decision making, providing an auditable justification for all alerts regardless of volume. And then it needs seconds to do that.
Multiple variants of artificial intelligence powers this technology. The company thinks that this new category of solutions that the Nasdaq Automated Investigator has established has broad applicability. Nasdaq wants to roll out functionality across complementary financial crime segments soon.
Darren Innes, the Head of AML Technology in Nasdaq, stated that they had designed the Nasdaq Automated Investigator to automate the complex stages of an alert investigation process. The technology uses tools focused on the mechanics and effectiveness of the actual investigation.
The company’s solution improves the manually intensive anti-financial crime process. It fully automates all stages of the existing manual alert investigation process and delivers accurate, consistent decision-making at scale.
The company’s market technology powers more than 250 of the market participants and its infrastructure organizations worldwide, including broker-dealers, central securities depositories, regulators, clearinghouses, and exchanges, with mission-critical technology solutions.
- Trading Instrument