Moody’s Analytics provides financial intelligence and analytical tools to help business leaders make better, faster decisions. Their deep risk expertise, expansive information resources, and innovative application of technology help clients confidentlynavigate an evolving marketplace. They are known for industryleading and award-winning solutions, made up of research, data, software, and professional services, assembled to deliver a seamless customer experience. Moody’s Analytics creates confidence in thousands of organisations worldwide, with a commitment to excellence, an open mindset approach, and a focus on meeting customer needs.
According to Keith Berry, general manager of KYC at Moody’s Analytics, a key aim of the company is to enable organisations to understand risk, so they can make decisions with confidence. This is all the more poignant at a time when anti-money laundering (AML) and know-your-customer (KYC) teams within
an organisation receive an ever-increasing number of alerts, all of which need to be manually reviewed by analysts before an action is taken, like suspending or declining to open an account.
Additional strain, Berry explained, is felt amongst teams when firms face a high volume of alerts that seem to match a name to one on the risk database but are ultimately not a match upon further analysis. These are better known as false positives.
“As more data becomes available, companies can leverage AI and machine learning (ML) models to improve the efficiency and effectiveness of screening.” This is what Moody’s is helping its clients do. By implementing a more sophisticated risk assessment model, downstream investigations and decisionmaking time can be reduced.
Breaking down barriers
When looking to deploy technology solutions, firms can face a myriad of barriers. Berry pointed to a recent research report Moody’s Analytics published where the company heard directly from risk and compliance professionals about the perceptions and understanding around perpetual KYC (pKYC). As firms start to explore automated, integrated workflows of data checks that occur in near real-time, Moody’s heard first-hand some of the barriers they face.
“There can be resistance to an overly automated approach,” Berry said, “in which they need help understanding the logic underlying the model, which could leave companies unable to understand their system. We often hear that human intelligence must remain supreme in KYC.”
Moody’s Analytics AI Review solution is a key part in helping to tackle these barriers and challenges. The solution can help screen and monitor individuals and entities quickly, according to firm-specific risk profiles and appetite.
According to Berry, this advanced screening solution allows Moody’s customers to effectively and efficiently comply with global AML and KYC regulations, empowering compliance and risk teams to make better decisions about whom they are doing business with. AI Review can also reduce false positives by as
much as 70% while prioritising true alerts to reduce the time-todecision to seconds.
AI Review is a pure-technology, first-level screening solution driven by ML models and produces an alert confidence score that mimics a human analyst on any inquiry match. “Using this technology to screen counterparty risk, users can quickly tune out false positives, leading to greater effectiveness and
efficiency for compliance teams,” Berry said.
The advancement of AI
Although it is not a new development, AI and ML have been thrust into the limelight recently in part due to attention that GenerativeAI technologies such as ChatGPT created. Such technologies have become increasingly advanced.
In the KYC and AML space, Berry said these advancements in AI and ML models are helping to automate manual processes. Such solutions are enhancing risk assessment, reducing false positives, and improving the overall efficiency and effectiveness of compliance programs. However, despite the benefits of integrating AI and ML tools into these processes, companies do encounter some barriers when looking to leverage such tools.
One such barrier, according to Berry, is data quality and availability. He highlighted that AI systems heavily rely on high-quality and comprehensive data for effective training and decision making. However, in reality AML data can be fragmented, incomplete or varying in quality.
In addition, implementing AI solutions while adhering to regulatory frameworks and guidelines can be complex for companies to navigate. “Organisations must ensure that AI systems are transparent, auditable, and compliant with regulatory standards such as explainability, fairness, and nondiscrimination,” Berry said.
AI models, Berry continued, especially complex deep learning models, are often considered “opaque boxes” as they lack interpretability. Understanding how an AI system reaches its decisions or predictions is crucial in the AML industry to justify outcomes and provide explanations for regulatory compliance.
Finally, a further challenge a company may encounter when looking to leverage AI tools for KYC purposes, is the implementation costs and integration. “Deploying AI systems can involve significant costs, including technology infrastructure, data management, model development, and ongoing maintenance,” Berry said. “Organisations need to invest in skilled resources, robust IT infrastructure, and seamless integration with existing systems and processes.”
According to Berry, Moody’s Analytics KYC solutions are transforming risk and compliance, creating a world where risk is understood so decisions can be made with confidence.
“Our customers build their own unique KYC ecosystem using our flexible workflow orchestration platform, award-winning datasets, analytical insights, and integrations with global providers to create powerful risk management solutions,” Berry said.
Harnessing Moody’s innovative technology and industry expertise, the company automates accurate screening and swift onboarding of customers and third-parties. Further, Moody’s Analytics continues its support of its customers throughout the customer lifecycle by enabling the perpetual monitoring
of counterparty risk across global business networks in near real-time.
Moody’s Analytics KYC is helping customers automate onboarding journeys in 197 countries, across 211 jurisdictions: completing over 800 million new customer and third-party checks each day on average in 2022, including screening against its database of over 17 million risk profiles, 450 million
entities, and 34,000 sanctioned entities. “Our configurable solutions empower risk and compliance professionals to deliver compliance efficiency and excellent customer experiences with no compromise,” Berry added.
Reaping the benefits
What differentiates Moody’s Analytics AI Review to other solutions in the market, according to Berry, is that AI Reviewcombines technology with the power of data in the company’s Grid database. Grid is the world’s most comprehensive risk database of adverse media, sanctions, watchlists, and politically exposed persons (PEPs). Risk information is curated into detailed profiles by individuals or organisations, giving insight into all associated, risk-relevant data in structured and detailed reports.
With AI Review, companies can benefit from greater protection from regulatory fines and reputational damage by helping compliance and risk teams effectively screen a large volume of customers against more data without incurring additional costs or resources or decreasing productivity.
Companies can also benefit from unparalleled data, Berry continued. They can derive deep insight from Moody’s Analytics robust database of risk information that is curated and standardised into detailed profiles by individuals or organisations. “We have helped customers screen and continuously monitor over six trillion names, providing more precise decisions, fewer false positive results, and greater efficiency,” he said.
Lastly, companies can reap the benefits of greater operational efficiency with the predictive power of AI Review. The solution identifies and scores potential matches that can be quickly filtered as alerts or no-matches so compliance and risk teams can prioritise where the most work is needed.
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