The Bank for International Settlements published a newsletter presenting Basel Committee findings on anti-money laundering and countering the financing of terrorism (AML/CFT) supervision, drawing on a stocktake across 19 jurisdictions and an industry workshop. The findings highlight data quality and analytical capacity as constraints on supervisory risk assessments. They also identify potential benefits from artificial intelligence (AI) in transaction monitoring, while emphasising the need for human oversight and explainable results. The stocktake found that AML/CFT questionnaires are a central source of supervisory information, with most authorities collecting more than 100 data points annually. Manual processing remains widespread, and supervisors are exploring supervisory technology to automate analysis and improve insights. Risk assessments typically weigh inherent exposures, including customer and geographic risks, against the adequacy of controls to determine residual risk and direct supervisory attention. Key challenges include incomplete or poor data, maintaining focus on areas of greatest risk, and managing complexities arising from cross-border activity and differing regulatory expectations. Methodologies also need regular updates to reflect evolving risks. At the Basel Committee’s November 2024 industry workshop, participants discussed how AI and machine learning could improve anomaly detection, customer segmentation and dynamic monitoring thresholds. These benefits depend on sound data management, while poor data, algorithmic bias and resource demands complicate adoption. Participants emphasised that AI should complement traditional monitoring rather than replace it. Human involvement remains critical for model validation, alert review and final decisions on suspicious transaction reports, while explainable results are essential to meet regulatory expectations. Some participants also identified regulatory uncertainty as an obstacle to adoption.
Bank for International Settlements publishes Basel Committee findings on AML/CFT supervision across 19 jurisdictions and artificial intelligence in transaction monitoring
The Bank for International Settlements published Basel Committee findings from an anti-money laundering and countering the financing of terrorism supervisory stocktake across 19 jurisdictions and a November 2024 industry workshop. The stocktake identified widespread manual data processing and challenges with data quality, risk assessment and cross-border supervision. Workshop participants highlighted artificial intelligence’s potential to improve transaction monitoring, while emphasising sound data management, explainable results and human oversight of models, alerts and suspicious transaction reporting decisions.