Banks in Southeast Asia Face High Levels of False Positives

Banks in Southeast Asia Face Challenges in Detecting and Preventing Financial Crime

The Problem: High Levels of False Positives

In Southeast Asia, banks are struggling with high levels of false positives generated by traditional monitoring processes. According to market participants, up to 99% of alerts fall into this category. This inefficiency and inaccuracy waste the time of skilled and expensive staff who cannot identify and concentrate on genuine cases that require their expertise.

Regulatory Pressure

Regulators in the region emphasize advanced data analytics as a key means of detecting and disrupting illicit activity in the financial system. Banks are under pressure to invest in technology to meet these regulatory requirements.

The Benefits of Advanced Data Analytics

Moving to advanced data-analytics systems offers several benefits, including:

Timeliness: Automation allows suspicious transactions to be detected in real time and blocked as they pass through the bank’s systems.
360-degree surveillance: Advanced data analytics enable banks to monitor both customers and their own staff through a single system and dashboard.
Comprehensiveness: A technology-based approach allows the bank to monitor every transaction in its system, an impossible task for humans.
Focus on the individual customer: Data analytics enable each customer to be profiled, using that individual’s established patterns of behavior.
Augmented Intelligence: The latest generation of technology systems allow banks to combine the power of Machine Learning with the expertise and judgment of human intelligence.
Risk sensitivity: Advanced fraud detection systems use Artificial Intelligence to improve their ability to evaluate the risk of any transaction using a range of variables.
Efficiency: False positive alerts hugely reduce efficiency by absorbing the time of expert staff, who are an expensive and scarce resource.
Record-keeping: Automated fraud detection systems produce full audit trails and facilitate proper record-keeping, helping the bank comply with regulatory requirements.

The Strategic Decision

Banks in Southeast Asia need to take a strategic decision to invest in advanced technology to combat problems such as fraud and money laundering, rather than relying on tactical solutions. This investment will not only help them meet regulatory requirements but also improve their overall efficiency and effectiveness in detecting and preventing financial crime.