Sunday, 18 December 2016

POST The cost of policing payments

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regulators have imposed all kinds of measures upon the payments industry that can be grouped under the header of compliance, and that have been introduced to make life of criminals and terrorists more difficult: CDD, KYC, FATF, AML... All this comes at a price. Anti-Money Laundering (AML) efforts cost an estimated $7 billion annually in the U.S. alone.

From The Hidden Costs of Cards

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We erect (expensive) KYC barriers and the force institutions to conduct (expensive) AML operations. But suppose the KYC barriers were a lot lower so that more transactions entered the financial system. And the suppose the transaction data was fed, perhaps in a pseudonymised form, to a central AML factory, where AI and big data, rather than clerks and STR forms, formed the front line.

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Therefore detection requires behavioral pattern analysis of transactions occurring over time and involving a set of (not obviously) related real-world entities.

From Detecting Money Laundering — Startup.ML Conf

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