Money Laundering Detection Methods in UK Receive Boost with New Tool
A team of computer scientists has developed a revolutionary tool that can detect money laundering activity up to three times more effectively than conventional methods. The innovative software uses algorithms to identify suspicious patterns in financial data and is specifically designed to detect “smurfing” - a technique used by criminals to divide large sums of money into smaller transactions between multiple bank accounts.
How the Tool Works
The new tool, designed by researchers from the Department of Informatics, can scan 50 million transactions in less than a second. It analyzes complex graphs of financial data to rapidly identify when suspicious activity is occurring. The software is over three times more effective than current detection methods and can analyze larger amounts of data.
The Impact of Money Laundering
The United Nations Office on Drugs and Crime estimates that between 2% and 5% of global GDP is laundered each year, amounting to roughly £632 billion to over £1.5 trillion. Developing a quicker and more effective approach to detecting this criminal activity signals a major step in the right direction to address the issue and provide reassurance for financial institutions.
Advantages of the New Tool
- More effective than current detection methods
- Faster analysis, with the ability to scan 50 million transactions in less than a second
- Automated process, reducing the risk of human error
- Open source and freely available to access, allowing financial institutions to use it to improve their detection methods
Testing and Results
The tool has been tested using real data from an anonymous Czech bank and fictional cases based on predictions of common patterns and activity present in cases of real money laundering. In both instances, the algorithms were able to detect all suspicious patterns in the transactions.
Future Development
The researchers are now working to further improve the tool’s speed and accuracy. The breakthrough technology has potential uses beyond money laundering detection, including:
- Optimizing marketing campaigns by enabling retailers to find and detect the most profitable bundles of products
- Improving the accuracy of retail data at speed