Machine Learning for Anti-Money Laundering and Know Your Customer Programs

The ability to actively monitor and identify data disparities and suspicious activity early on can help companies fight money laundering activities and the adverse effects they create, including disciplinary action, substantial fines, and damage to a company’s reputation.  

Recently, the Financial Industry Regulatory Authority (FINRA) fined a firm $16.5 million for having serious deficiencies in its anti-money laundering (AML) program. FINRA also fined a firm (and its affiliated introducing firm) $17 million for having a poor customer identification program (CIP), among other deficiencies, that can lead to money laundering and the inability to prevent its detection. 

In this guide, we explore the basic tenets of AML and know your customer (KYC), as well as how you can leverage the power of machine learning technologies to enhance your firm’s compliance programs.