Regtech could save banks £2.7bn on AML compliance Global Trade Review (GTR)

Banks are squandering £2.7bn a year because of outdated anti-money laundering (AML) systems – costs that could be saved by adopting machine learning and big data technology, new calculations show. According to FortyTwo Data, an AML technology company, financial institutions are wasting armies of staff on chasing millions of false leads – red flags that turn out to be innocent – generated every year by legacy systems that rely on stale rules and scenarios. It concludes that, on average, 55% of false positives can be eradicated by modern systems, accounting for 42% of banks' cost on AML compliance. FortyTwo Data refers to figures from WealthInsight, which predicts that global spending on AML compliance will hit £6.4bn billion this year. The potential savings thus equates to £2.7bn.