Netherlands Antilles Cracks Down on Financial Crime with Machine Learning Models

The Netherlands Antilles is taking a major step forward in the fight against financial crime by implementing machine learning models to detect and prevent illicit activities. As a hub for international banking and commerce, the islands have become a prime target for money launderers and other financial criminals.

A Growing Problem: Financial Crime in the Netherlands Antilles

• The strategic location of the Netherlands Antilles in the Caribbean makes it an attractive destination for international banking and commerce.
• This has led to an increase in financial crime, including money laundering and other illicit activities.
• Current regulations limit the effectiveness of solutions to prevent financial crime due to strict data protection laws.

A New Approach: Transaction Monitoring Netherlands (TMNL)

In July 2022, Transaction Monitoring Netherlands (TMNL) was established as a first-of-its-kind mechanism. TMNL brings together five major banks - ABN AMRO, ING, Rabobank, De Volksbank, and Triodos Bank - to monitor transactions across the entire network.

• By pooling their data, TMNL analysis will identify links between corporates that move illicit capital between institutions to avoid detection.
• However, models like TMNL are not without limitations, as sharing sensitive information is a major hurdle.

Federated Machine Learning: The Logical Step Forward

Regulators and financial institutions are turning to federated machine learning (FL) solutions to address the challenges of sharing sensitive information. FL allows an algorithm to be trained across heterogeneous datasets without sharing sensitive information, enabling firms to collaborate while maintaining data privacy.

• Consilient, a leading company in the field of AML technology, is pioneering the use of FL within AML.
• By bringing the analytics to the data, Consilient provides holistic insights from entire financial markets, allowing for broader analysis than institutions could obtain independently.

The Future of Financial Crime Prevention

As the Netherlands Antilles continues to crack down on financial crime, machine learning models and federated learning solutions are set to play a crucial role in preventing illicit activities and protecting the integrity of the financial system.