About 80% Indian financial institutions employ AI for compliance procedures: Report

Artificial intelligence (AI) and advanced analytics are fast emerging as mechanisms to deal with financial crime compliance. In India, 78% of financial institutions are employing analytics and AI to enhance compliance procedures, and 85% are enhancing data utilisation through advanced analytics, a recent report has shown. This is the annual report by LexisNexis Risk Solutions on the ‘true cost’ of financial crime compliance. 

The study examines how financial institutions deal with the expenses and challenges associated with financial crime compliance requirements. While the cost of such compliance was found to be $206.1 billion in the past 12 months, in India, the expense is $11.5 billion. In the APAC region particularly, the respondents were found to be vulnerable to financial crime involving digital payments (65%) and AI (60%).

“Our report underscores that financial institutions are making significant investments to stay compliant with financial crime regulations. Effective collaboration within these institutions is pivotal for enhancing the customer experience while managing these costs. Leveraging emerging technologies alongside existing solutions can empower institutions to achieve their objectives and deliver optimal customer outcomes,” said Grayson Clarke, senior vice-president for LexisNexis Risk Solutions.

A December 2022 IIF and EY survey report on machine learning uses in credit risk found that more than half of the responding banks have already deployed machine learning in banks; 30% of the remaining have also started pilot projects. 

Notably, in June, Wipro launched Industry Innovation Experience for Financial Services, built on the Microsoft Cloud platform. The Innovation Experience will allow financial services firms to explore new solutions in an immersive 3D environment. Solutions currently available as part of the Experience range from prevention of financial crime and loan origination to those that help transform core banking systems and maximise cloud investments, the company said.