2024-10-29 22:10:00
World economies could save $3.13 trillion by using AI to detect and prevent money laundering and terrorist financing, which cost trillions of dollars annually, according to the first Napier AI/AML Indexpublished today by Napier A.I in partnership with GlobalData.
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See the large economies, and the top and bottom performing countries for effectiveness and efficiency of AML. (Graphic: Business Wire)
The Napier AI/AML Index provides the industry’s most comprehensive insights into the impact of AI on anti-money laundering and countering the financing of terrorism (AML/CFT), ranking 35 international markets based on their effectiveness in financial crime compliance.
The report’s main conclusions include the following:
- North America, the Nordic countries and Central Europe top the rankings, respectively, in terms of geographic regions with the lowest percentage of GDP lost to money laundering.
- Italy, the Czech Republic and Finland are at the top, respectively, in terms of countries with the most effective anti-money laundering spending.
- Regulated companies such as banks, payments companies, wealth and asset managers, telecommunications companies, and insurance companies can save $138 billion in compliance costs by implementing AI into their AML strategies.
- 5% of global GDP – around US$5.2 trillion – is channeled to the black market through money laundering.
- Globally, the US is the country that gains the most from AI-based financial crime compliance solutions, potentially saving financial institutions $23.4 billion in compliance costs, followed by Germany ($14.2 billion) and France ($11.08 billion).
- The United Arab Emirates has the highest GDP loss to financial crimes in the world, at 9.32%, followed by Brazil, at 8.74%.
- Although financial institutions spend heavily on crime compliance, the investment is justified when they recover billions and strengthen protections. The focus must be on spending effectively, using AI tools to increase compliance and economic recovery.
The dr. Janet Bastiman, chief data scientist at Napier AI, said: “Financial centers are much more vulnerable to financial crime. Mature economies such as Canada, the US and the UK have effectively balanced open banking and AI innovation with the cost of managing financial crime risks. Fast-growing economies with strong financial services sectors are seeking to find this balance to reduce financial losses to the black market.”
Greg Watson, CEO of Napier AI, said: “We are at the inflection point where technology can drive monumental change in the prevention of financial crime. At Napier AI, we see AI not just as a tool, but as a catalyst that can enhance compliance efforts around the world, delivering better results with greater efficiency. The numbers in this inaugural report are a testament to what is possible when AI is effectively AML, in what we call a compliance-first approach.”
O Napier AI/AML Index uses GDP data, crime data from the United Nations Office on Drugs and Crime (UNODC) and the Organized Crime Index, and compliance effectiveness from the FATF and Basel Index. It also includes insights from senior executives on the impact of AI on AML strategies.
About Napier AI
Napier AI is a RegTech that provides anti-money laundering and financial crime compliance software for financial institutions, payments and wealth and asset management companies. Napier AI designs and develops technological innovations to make a measurable difference in reducing financial crime. Trusted by more than 150 institutions around the world, the company’s platform (Napier AI Continuum) is transforming compliance from a legal obligation into a competitive advantage.
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Source: BUSINESS WIRE
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