We have been asked to explain the differences between rules-engines and machine learning for anti-money laundering/banking secrecy act applications on numerous occasions. This question typically arises from the compliance team, wanting to better understand the difference between their current process and that used by a modern AI-based AML system.
Topics: model validation, machine learning, money laundering, AML/BSA, regulatory compliance, AML/BSA/CTF
Introduction
Topics: banking, AML, model validation, occam's razor, mathematical models, risk management, financial risk, data analytics
Banks are dependent upon models of all kinds. This is because reality is much too complex for us to understand well enough for perfect predictions of the future. Models are used as a simplification of reality.
Topics: KYC, AML, predictive analytics, fintech, model validation, bsa, regtech, modelling
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