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Mizuho boosts its financial crime fighting skills with AI


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Artificial intelligence (AI)-powered solutions are increasingly gaining traction in the banking industry, with organizations deploying them across ever-more areas of their businesses.

Japanese-based Mizuho Bank has now joined this trend, announcing last week that it will test IBM's new AI-based regtech solution, Financial Crimes Due Diligence with Watson, as it seeks to improve its ability to prevent and detect financial crime like money laundering (ML) and financing of terrorism (FT). Mizuho will first deploy the solution, which automates the retrieval and analysis of data used in detecting financial crime, in Singapore.

Regulators are getting tougher on banks when it comes to financial crime. Globally, we've seen a swathe of new regulation designed to boost prevention and detection of ML and FT.

  • The EU's 4th Money Laundering Directive (4MD) came into force in June 2017 and introduced more stringent criteria for financial crime risk assessments by a wide range of financial institutions.
  • The Basel Committee on Banking Supervision (BCBS) also issued new guidelines for global banks on how to incorporate ML and FT into their overall risk assessments in June.
  • In terms of domestic regulators, the Monetary Authority of Singapore (MAS) has been particularly active — it fined Credit Suisse $900,000 in May for breaching anti-money laundering (AML) guidelines as part of its biggest ever probe into ML. This may well have influenced Mizuho's decision to test IBM's solution in the country first.

As requirements get tougher, banks will increasingly turn to AI-based solutions to meet them. With the number of regulations increasing, so is the volume of data banks have to sift through, and the alternative to AI-powered products for many banks is to hire more compliance employees. That's not only expensive, but assumes that employees using legacy, manual processes will actually be enough to ensure compliance — an increasingly unlikely scenario. Consequently, AI-powered tools that automate and accelerate the collection and analysis of data related to regulatory changes will likely be deployed at a rapid pace. 

Sarah Kocianski, senior research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on U.S. fintech regulation that:

  • Examines the current regulatory landscape in the U.S. 
  • Explains how it is negatively affecting the fintech industry.
  • Outlines the initiatives currently in play from major regulatory agencies. 
  • Considers the future of U.S. fintech regulation and its potential impact on the fintech sector. 

To get the full report, subscribe to an All-Access pass to BI Intelligence and gain immediate access to this report and more than 250 other expertly researched reports. As an added bonus, you'll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. » Learn More Now

You can also purchase and download the full report from our research store.

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