Singapore Implements Artificial Intelligence in Financial Institutions to Curb Money Laundering
November 6, 2023
The Monetary Authority of Singapore (MAS) is all set to embrace Artificial Intelligence (AI) in financial institutions to combat money laundering activities.
Mr. Ravi Menon, the managing director at MAS reportedly said, “With money launderers operating across different financial institutions, AI can help to strengthen big-picture surveillance”.
MAS utilizes advanced algorithms and data analytics capabilities to identify and investigate fraud and other suspicious activities. However, Singapore’s money laundering scandal worth billions of dollars continues to send shockwaves throughout the country and the need to reinforce surveillance on a big scale.
MAS and six other commercial banks in Singapore are collaboratively developing COSMIC, Collaborative Sharing of Money Laundering/Terrorism Financing Information and Cases, the information-sharing platform. This platform under its roll phase is designed for financial institutions to share information on suspicious clients or transactions.
Currently, Financial institutions are restricted by confidentiality requirements that prevent them from notifying each other about suspicious transactions. Mr. Memon during an interview with CNA said that AI could be used in COSMIC with the aim of eliminating these information gaps between financial institutions.
Singapore is going to hold a FinTech Festival which will highlight the growth and implementation of artificial intelligence in financial services. The event is scheduled to take place from November 15 to 17 at the Singapore Expo.
While talking about the extensive investigation into money laundering, the importance of multi-layer defense is not only restricted to financial institutions but also focuses on real estate agents and corporate service providers.
Many countries are looking to take initiative in the implementation of artificial intelligence with varied approaches, focusing on ethical implications, economic benefits, and technological integration. The United Kingdom is taking multiple initiatives in this regard. Recently, the UK hosted a two-day summit on AI to discuss advancements, policies, and the future impact of AI technologies.
This is not all, the country is looking to regulate the use of tools in AI for this purpose, the relevant research is also underway. The Financial Conduct Authority (FCA) in the UK has established a Synthetic Data Expert Group (SDEG) in order to recognize the potential of synthetic data in financial institutions. Recently, the FCA shared the progress of the SDEG on the real-life uses of synthetic data to help practitioners and policymakers.
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