As the ecosystem of third parties continues to grow, AML due diligence has become more difficult. The challenge of identifying and vetting suppliers, consultants, agents, affiliates and resellers would be insurmountable without the use of technology.
Automated investigative due diligence tools deploy highly flexible risk models and intelligent third-party segmentation to dynamically assess third party information. This allows for deeper insights, increased accuracy and more comprehensive reporting.
For example, in Residence and Citizenship by Investment due diligence, technology allows researchers to hit an ever-moving target, an increasingly important factor under increased scrutiny and regulations of these programs. AI-enabled due diligence can conduct ongoing research against individuals and entities, staying up to date on things that can change their risk profile.
After AI catches changes and developments, researchers play a pivotal role in synthesizing and interpreting the information, informing clients in a timely manner.
Technology can also help researchers develop a clearer and more accurate database of regulations. Regulatory requirements are scattered across different countries and government entities and compiled in a wide-variety of sources. AI can identify, streamline and update regulatory requirements to ensure that researchers are evaluating their findings against the most current and accurate measures.
Notwithstanding these advancements, technology still has more in store for due diligence. Emerging innovations include the development and expansion of NLP capabilities. The growth of publicly available information and social media in conjunction with NLP and deep learning advancements will also help better identify the subjects to be researched and provide the necessary context, when faced with a larger pool of data.
As AI gains the ability to essentially learn on the fly, researchers can interact with content and scope, optimizing results for a specific due diligence subject. These capabilities will dramatically improve efficiency in researchers’ workflow and provide more comprehensive coverage of available information, ultimately resulting in enhanced risk assessment.
Technology has already completely transformed the due diligence process, allowing researchers to deploy their skills in more meaningful ways while taking full advantage of the accuracy, auditability and efficiency automation has to offer. The next generation of advancements in AI, NLP and deep learning are underway, allowing innovators to continue to reimagine due diligence.
Victoria Sztanek, CAMS, is a Research Manager working with Exiger’s due diligence team. She is a Certified Anti-Money Laundering Specialist with an MA from the University of Toronto.