Research Outline

Pain Points Using AML FinTech in the U.S. Financial Industry


Identify 3-4 pain points regarding the use of anti-money laundering (AML) FinTech in the U.S. banking/financial industry, how it is negatively affecting the industry as whole, solutions that industry experts are recommending and examples where a bank[s] has experienced the issue and - where available - how they overcame it.

Early Findings

Regulatory Obligations Stifling Innovation

  • The Office of the Comptroller of the Currency (OCC) is supporting innovation in the banking/finance sector through an Innovation Pilot Program.
  • Regulators, in a joint statement, encouraged commercial banks to "consider, evaluate, and, where appropriate, implement innovative approaches to meet their AML compliance obligations".
  • While innovation is being encouraged, it has not removed or lessened the obligations of the sector to ensure that they comply with all statutory and regulartory requirements.
  • Some of those in the sector felt that this stifled innovators who would prefer a form of "formalized regulatory forbearance."
  • These obligations could be mitigated by incorporating RegTech in with their AML FinTech use to minimize "risk from misconduct and regulatory investigations".

Shying Away from Disruption

  • Deloitte Insights highlights that "the new wave of disruption" is going to be greater than those previously experienced and that it will bring with it "endless opportunities" for those in the banking/financial sector who are willing to look beyond short term distraction.
  • Embracing the next wave of disruption will mean organizations will need to invest in "technology infrastructure, data management and talent".

Emerging Threats and Pressures

  • The COVID-19 pandemic has seen emerging money laundering threats and, in order to cope with such rapidly changing threats, organizations in the sector may need to respond at a faster rate then they may otherwise be ready to do so.
  • The industry is also under pressure to respond to multi-faceted pressures including compressed margins, "political shifts and global financial changes".
  • Responding to emerging threats and pressures will require a "reinvention strategy" which may cause issues for organizations who may not be in a position, as yet, to do so.

Legacy Operating Structures

  • Many banks still use legacy systems which challenge their ability to embrace FinTech and the use of "data analytics to ensure credit risk and fraud detection teams" can work in a collaborative manner.
  • Legacy systems require human intervention in the detection of money laundering activities but the need to move away from known systems to distributed technology may be holding some organizations back from using anti-money laundering FinTech.
  • Addressing transformation of how customers use financial services and mitigating how criminals take advantage of those changes, may pose challenges for those in the sector using legacy operating systems.

Summary of Early Findings Relevant to the Goals

  • In this first hour of research, we were able to identify four potential pain points impacting the use of AML FinTech in the banking/finance industry.
  • We were able to uncover a number of recent industry reports focusing on challenges and opportunities which could be further investigated to address the negative affects, industry experts proposed solutions, to identify banks/financial institutes who may be experiencing these pain points and those who are taking steps to overcome them.
  • Our recommendations reflect the information we were able to uncover in early research.