Wednesday, November 29, 2017

Despite enormous effort and investments from the financial and public sectors to detect and counter money laundering, illicit flows in the financial system are still significant, growing, and often moving undeterred.

The difficulty and scale of conducting KYC, automatically detecting suspicious transactions and conducting follow-up investigations for financial institutions in compliance with anti-money laundering/counter terrorism financing ("AML/CFT") regulation is one of the key problems.

However, the deployment of new technology, combined with targeted regulatory reform, could significantly improve the effectiveness of the global AML/CFT system. New technologies including machine learning, digital identity, KYC utilities and distributed ledger technology (DLT, also called "blockchain") can improve compliance capabilities in the financial sector in a variety of ways, while regulatory reforms should address barriers to information sharing.

IIF Authors

Matthew Ekberg

Senior Policy Advisor