Singapore Leverages AI in Fight Against Money Laundering
In a bid to enhance its financial industry, Singapore has announced plans to utilize artificial intelligence (AI) tools to strengthen its monitoring of the sector and combat unlawful activities.
Ravi Menon, the head of the Monetary Authority of Singapore (MAS), revealed in an interview with Channel News Asia (CNA) that the banking regulator is looking into incorporating AI to crackdown on money laundering in the country. These plans were disclosed ahead of the Singapore Fintech Festival, a event focused on showcasing the potential applications of AI in financial markets.
While the MAS has previously made efforts to combat money laundering, the integration of AI is expected to provide additional options for financial regulators in Singapore. Menon highlights the potential for “big-picture surveillance” using AI, as money launderers often operate across multiple financial jurisdictions.
Leveraging AI’s capability to process large data sets in seconds could empower MAS and other regulators to thwart the activities of money launderers. For instance, Menon underscored AI’s potential integration with the Collaborative Sharing of Money Laundering/Terrorism Financing Information and Cases (COSMIC), which serves as a platform for sharing information on suspicious transactions and client details among financial institutions.
The proposed integration of AI tools into COSMIC is set to begin in 2024, and is expected to provide “additional insights” for law enforcement to identify red flags and anomalies in financial transactions.
Despite the potential benefits of AI, Menon exercised caution and emphasized the need for a balanced approach in integrating this technology, stating that regulators should be realistic in appreciating both the benefits and the risks.
Apart from AI, Singapore’s financial regulators are also exploring other emerging technologies to enhance processing in the payments ecosystem. The MAS has been experimenting with blockchain and conducting pilots to explore new use cases such as tokenization of financial instruments.
Following a series of successful initiatives, MAS has partnered with financial regulators in the U.K., Japan, and Switzerland to expedite its tokenization experiments, with the aim of promoting the development of common standards and regulatory frameworks for cross-border interoperability and the sustainable growth of the digital asset ecosystem.
### News source: coingeek.com