Deploying artificial intelligence for anti-money laundering and asset recovery: the dawn of a new era
| Date | 19 May 2023 |
| Pages | 155-166 |
| DOI | https://doi.org/10.1108/JMLC-03-2023-0050 |
| Published date | 19 May 2023 |
| Subject Matter | Accounting & finance,Financial risk/company failure,Financial compliance/regulation,Financial crime |
| Author | Georgios Pavlidis |
Deploying artificial intelligence
for anti-money laundering and
asset recovery: the dawn
of a new era
Georgios Pavlidis
Faculty of Law, Neapolis University, Paphos, Cyprus
Abstract
Purpose –This paper aimsto critically examine the digital transformation of anti-moneylaundering (AML)
and countering the financing of terrorism(CFT) in light of the Financial Action Task Force (FATF) San Jose
principles, the Organisation for Economic Co-operation and Development (OECD) principles for artificial
intelligence(AI) and the proposed European Union (EU) Artificial IntelligenceAct. The authors argue that AI
tools can revolutionize AML/CFT and asset recovery, but there is a need to strike a balance between
optimizingAML efficiency and safeguarding fundamentalrights.
Design/methodology/approach –This paper drawson reports, legislation, legal scholarshipsand other
open-sourcedata on the digital transformation of AML/CFT, particularlythe deployment of AI in this context.
Findings –A new regulatory framework with robust safeguards is necessary to mitigate the risks
associatedwith the use of new technologies in the AML context.
Originality/value –This study is one of thefirst to examine the use of AI in the AML/CFT context in light
of the FATF San Jose principles,the OECD AI principles and the proposed EU AI Act.
Keywords Anti-money laundering (AML), Artificial intelligence (AI), Digitalization, Asset recovery,
Know your customer (KYC), Transaction monitoring
Paper type Research paper
1. Introduction
The deployment of new technologies for anti-money laundering (AML) and countering the
financing of terrorism (CFT) has been hailed as a “game changer”and an “up-and-coming
revolution”(McKinseyand Company, 2022;KPMG, 2018). New technologies in this field are
often referred to as regulatory technology (RegTech), for they promise to improve AML/
CFT compliance and enhance the delivery of regulatory requirements through the use of
artificial intelligence (AI) and its various subsets, such as machine learning and natural
language processing (McCarthy, 2022;Brynjolfsson and McAfee, 2017;Stone et al.,2016).
Evidently, the ongoing digital transformation of AML/CFT must adhere to and keep pace
with the relevant provisions of national and European Union (EU) laws, as well as the soft
© Georgios Pavlidis. Published by Emerald Publishing Limited. This article is published under the
Creative Commons Attribution (CC BY 4.0) licence. Anyone may reproduce, distribute, translate and
create derivative works of this article (for both commercial and non-commercial purposes), subject to
full attribution to the original publication and authors. The full terms of this licence may be seen at
http://creativecommons.org/licences/by/4.0/legalcode
This study was supported by the EU’s Erasmus1Programme. This publication reflects solely
the author’s views. The European Education and Culture Executive Agency (EACEA) and the
European Commission are not responsible for any use of the information presented herein.
Dawn of a
new era
155
Received7 March 2023
Revised27 April 2023
Accepted27 April 2023
Journalof Money Laundering
Control
Vol.26 No. 7, 2023
pp. 155-166
EmeraldPublishing Limited
1368-5201
DOI 10.1108/JMLC-03-2023-0050
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1368-5201.htm
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