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Why regulators must adopt AI now

18 March 2024
Knowledge Base

by Daoud Abdel Hadi

It’s a new world – defined by rapid technological advancements, and witnessing more organisations embracing AI. To navigate this ever changing landscape, it is essential that regulators recognise traditional governance principles no longer suffice. In fact, relying on these outdated principles could result in more harm than good. Regulators must begin to use the power of AI to modernise their approach and promote responsible innovation. As the world turns, it’s essential for regulators to foster an ecosystem that integrates AI effectively and protects individuals at the same time. Continue reading…

FinServ Forecast 2024: 12 technology and trend predictions

03 January 2024
Knowledge Base

As in other industries, the explosion of generative AI has forced the financial services sector to quickly adapt while riding a wave of regulatory and ethical questions. How will banks, insurers and other financial firms balance the risks and rewards of GenAI and other transformative tech in the year ahead? Experts and execs from SAS anticipate a year of great promise – and potential peril – as generative AI and other technologies reshape financial services. Continue reading…

Will KYC become obsolete in the AI era?

23 December 2023
Knowledge Base

by Rasha Abdel Jalil

Generative artificial intelligence (AI) is reshaping our world, moving beyond its initial harmless applications to power more sinister activities. Its ability to create convincing fake content is enabling criminals to exploit personal information obtained from the vast numbers of internet-connected people for illicit purposes. In response, businesses bolster defences and often rely on Know Your Customer (KYC) as an essential step in fraud prevention. While advances like biometrics and facial recognition have undoubtedly improved identity verification, KYC isn’t foolproof. Criminals are good at finding these weaknesses and slipping past checks. Continue reading…

Political agreement on Artificial Intelligence Act

10 December 2023
Knowledge Base

The Commission welcomes the political agreement reached between the European Parliament and the Council on the Artificial Intelligence Act (AI Act), proposed by the Commission in April 2021. Ursula von der Leyen, President of the European Commission, said: “Artificial intelligence is already changing our everyday lives. And this is just the beginning. Used wisely and widely, AI promises huge benefits to our economy and society. Therefore, I very much welcome today’s political agreement by the European Parliament and the Council on the Artificial Intelligence Act. The EU’s AI Act is the first-ever comprehensive legal framework on Artificial Intelligence worldwide. So, this is a historic moment. The AI Act transposes European values to a new era. By focusing regulation on identifiable risks, today’s agreement will foster responsible innovation in Europe. By guaranteeing the safety and fundamental rights of people and businesses, it will support the development, deployment and take-up of trustworthy AI in the EU. Our AI Act will make a substantial contribution to the development of global rules and principles for human-centric AI.” Continue reading…

Ajay Katara

Ajay Katara

Consulting Partner and Head the RegTech Portfolio in Banking Risk Management area at Tata Consultancy Services (TCS)

Gen AI Use Cases in Risk and Compliance

30 November 2023
Knowledge Base

Generative Artificial Intelligence or Gen AI as it is popularly called has recently emerged as a technology enabler which is seeing a lot of use cases across the banking industry. Currently, many banks are trying to experiment with this new tool and understand amendable areas that can benefit from this technological intervention. Adoption patterns currently indicate that many banks and financial institutions are starting small with internal use cases to understand and analyse the efficacy of this intervention. Within the banking sector, Gen AI has a lot of applications in the risk and compliance value chain across areas of Risk Identification, Risk Assessment, Risk Monitoring and Risk Reporting. As per industry estimates, market size is expected to grow at a CAGR of 34% (approx.) in risk and compliance management. Given the focus of regulatory scrutiny on the adoption of Gen AI in the risk and compliance function, currently the initial set of use cases are more focused on augmenting the existing functions rather than fully automating them, hence the adoption of Gen AI is slowly but steadily progressing. Integration of Gen AI with the existing RegTech tools can yield a lot of benefits in terms of improved automation and cost savings which will make the current processes more efficient and also enable near real time decision making as well in certain risk and compliance functions. Continue reading…

Leveraging Gen AI for Basel III End Game Compliance

21 November 2023
Knowledge Base

by Ajay Katara

Basel III end game is the latest update to the US Capital requirements which will bring about sweeping changes to the existing capital requirements in place for the US banks. Under the existing provisions there are two approaches which apply to US banks. The standardised approach applies to all banking organisations (other than community banks) and advanced approaches apply to category 1 and category 2 US banks, and they must also compute Risk Weighted Assets (RWA) under the standardised too. The US regulators have proposed July 2025 for compliance with new requirements with a three-year transition period ending in Jun 2028. The new regulation will bring about a lot of changes and will fundamentally apply to banks with asset sizes greater than USD 100 Mn with specific changes applying to banks designated between category 1 to category IV. Continue reading…

How to tackle risk in the cloud with powerful AI and analytics

09 October 2023
Knowledge Base

As financial firms maneuver the continued fallout of recent bank failures, analytics and AI leader SAS is expanding its partnership with Microsoft to help banks better manage looming liquidity and interest rate risks. SAS® Asset and Liability Management (ALM), powered by Kamakura Risk Manager on Microsoft Azure, supports multi-period, scenario-based, integrated simulation and valuation for risk management, capital allocation and balance sheet optimization. Continue reading…

Future Compliance: The issues of Responsibility and Control of Artificial Intelligence

09 June 2023
Knowledge Base

by Sandro Severoni

In his novelette “The Bicentennial man” published in 1976, sixteen years later used as reference for the book “The Positronic Man” from him and Robert Silverberg, and in 1999 for the movie from Chris Columbus, Isaac Asimov depicted the character of a robot who evolves during two centuries from being a robot, created to serve as butler to a family that had early on discovered that it had some abilities to carve objects from wood, to a conscious being wanting to consider itself a man. As Thomas Metzinger mentioned in 2009 in his “The science of mind and the myth of the self”: “it is conceivable that someday we will be able to construct artificial agents (…) self-sustaining systems”, this may bring to consider that, if we were able to create such agents in self-sustaining machines possessing some kind of consciousness qualities, it will raise concerns about their moral status and how they are treated, included into a society, receive rights and legal protection. Continue reading…

Is voice the solution for financial services and compliance monitoring?

01 June 2023
Knowledge Base

by Nigel Cannings

The number of fines issued by the Financial Conduct Authority (FCA) more than doubled in 2022. From the breach of Anti-Money Laundering (AML) rules, and Know Your Customer (KYC) checks, to problems with operating guidelines, individuals and businesses within the UK paid out more than £215 million in fines last year. Regulations have become more stringent. Compliance is much more closely monitored, leaving businesses struggling not only to adhere to the regulations but to demonstrate that they have done so and one of the most effective solutions has taken the form of voice tech.  Continue reading…