Deploying Artificial Intelligence for Anti–Money Laundering and Asset Recovery: The Dawn of a New Era

Abstract

Purpose – This paper aims to critically examine the digital transformation of anti–money laundering and countering the financing of terrorism (AML/CFT) in light of the FATF San Jose principles, the OECD principles for artificial intelligence (AI) and the proposed EU Artificial Intelligence Act. We argue that AI tools can revolutionize AML/CFT and asset recovery, but there is a need to strike a balance between optimizing AML efficiency and safeguarding fundamental rights.

Design/methodology/approach – This paper draws on reports, legislation, legal scholarships and other open-source data on the digital transformation of AML/CFT, particularly the deployment of AI in this context.

Findings – A new regulatory framework with robust safeguards is necessary to mitigate the risks associated with the use of new technologies in the AML context.

Originality/value – This study is one of the first 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.

Note:

Keywords: Anti-money laundering (AML), Artificial intelligence (AI), Digitalization, Asset recovery, Know your customer (KYC), Transaction monitoring