Swiss Banking Industry Leverages Technology to Combat Financial Crimes and Enhance Compliance

A Leading Global Bank’s Journey with EY

Switzerland, known for its robust and sophisticated financial services sector, faces a growing challenge: financial crimes posing an increasingly complicated threat landscape. In this article, we explore how a leading global bank, with the help of EY, successfully employed technology to tackle financial crimes and enhance regulatory compliance.

The Challenges: Financial Crimes and Regulatory Compliance

Financial crimes, such as money laundering and terrorist financing, have long been a significant concern for the financial services industry. With an estimated $2 trillion laundered annually [1], there is a pressing need for effective solutions to tackle these complex issues. The Swiss financial sector, home to numerous international banks, has been no strangers to financial crimes.

To address these challenges, EY, a global professional services firm, collaborated with a large global bank to implement a solution that integrated advanced technology with the bank’s financial crime risk management program.

Phase I: Robotic Process Automation (RPA)

1. Reducing repetitive tasks: The first phase of the project involved the implementation of RPA to automate repetitive and labor-intensive tasks like data entry.
2. Significant time savings: The introduction of RPA led to a substantial reduction in the time taken to execute these tasks, freeing up staff to focus on more complex and higher-value activities.

Phase II: Machine Learning Algorithms

1. Detecting financial crimes: The second phase saw the implementation of machine learning algorithms that could analyze historical and real-time data to identify patterns and anomalies indicative of financial crimes.
2. Proactive identification of potential financial crimes: By leveraging this technology, the bank was able to detect and prevent potential cases of money laundering and other financial crimes much earlier and more effectively than before.

Phase III: Artificial Intelligence (AI)

1. Analyzing unstructured data: The integration of AI further enhanced the bank’s capabilities by allowing it to analyze unstructured data from various sources, including internal databases and external sources like social media and news articles.
2. Deep insights into customer risk profiles: This advancement enabled the bank to gain deeper insights into its customers and their associated risk profiles, further strengthening its compliance efforts.

Benefits Beyond Risk Mitigation and Regulatory Compliance

1. Improved operational efficiency: The advanced technology led to improved operational efficiency by automating mundane tasks, freeing up staff for more value-added activities.
2. Increased productivity: Staff was able to focus on more complex work, resulting in a more engaged and motivated workforce.
3. Cost savings: Automation and AI reduced the need for manual labor, leading to cost savings for the bank.

[1] UN Office on Drugs and Crime, Worldwide Asset Forfeiture Information and Monitoring System, 2017.

The Future of Swiss Banking: Embracing Technology

In a rapidly changing global landscape, Swiss banks must continue to adapt and innovate to meet the challenges of financial crimes and regulatory compliance. By embracing advanced technologies like RPA, machine learning, and AI, banks can significantly bolster their defenses against financial crimes and meet the evolving demands of regulators.

EY’s commitment to helping the banking sector adapt and thrive in the face of these challenges is evident through its collaboration with a leading global bank. As the banking sector continues to evolve, the role of technology in combating financial crimes and enhancing regulatory compliance will only become more crucial.