In a bid to become more efficient, HSBC Holdings Plc has collaborated with Silicon Valley-based Artificial Intelligence startup Ayasdi Inc to digitise some of its compliance processes.
“The banking group is implementing the company’s AI technology to automate anti-money-laundering investigations that have traditionally been conducted by thousands of humans,” Andy Maguire, Chief Operating Officer, HSBC Bank.
According to the startup, majority of the anti-money-laundering investigations at banks do not find suspicious activity that is resulting in the wastage of resources. In a pilot of Ayasdi’s technology, HSBC saw the number of investigations declined by 20 per cent without reducing the number of cases referred for more scrutiny.
“We reduce risks and it costs less money,” said Maguire.
In 2012, HSBC agreed to pay a $1.92 billion in fines to United States authorities for its role in drug money laundering of Mexico and other compliance lapses.
To cope with increased regulatory scrutiny and a set of new rules, banks went on a compliance hiring spree in the years following the financial crisis.
“Anti-money laundering check is a thing that the whole industry has thrown a lot of bodies at it because that was the way it was being done,” Maguire said.
Ayasdi’s Executive Chairman and co-founder Gurjeet Singh was in January appointed to HSBC’s new Technology Advisory Board, which provides advice and guidance to the bank on digital strategy.
