Deploying artificial intelligence for anti-money laundering and asset recovery: the dawn of a new era

Abstract

PurposeThis paper aims to critically examine the digital transformation of anti-money laundering (AML) and countering the financing of terrorism (CFT) in light of the Financial Action Task Force (FATF) San Jose principles, the Organisation for Economic Co-operation and Development (OECD) principles for artificial intelligence (AI) and the proposed European Union (EU) Artificial Intelligence Act. The authors argue that AI tools can revolutionize AML/CFT and asset recovery, but there is a need to strike a balance between optimizing AML efficiency and safeguarding fundamental rights.Design/methodology/approachThis paper draws on reports, legislation, legal scholarships and other open-source data on the digital transformation of AML/CFT, particularly the deployment of AI in this context.FindingsA new regulatory framework with robust safeguards is necessary to mitigate the risks associated with the use of new technologies in the AML context.Originality/valueThis study is one of the first to examine the use of AI in the AML/CFT context in light of the FATF San Jose principles, the OECD AI principles and the proposed EU AI Act.