Deploying artificial intelligence for anti-money laundering and asset recovery: the dawn of a new era

Abstract

Purpose – This paper aims to critically examine the digital transformation of anti-money laundering (AML) and countering the financing of terrorism (CFT) in light of the Financial Action Task Force (FATF) San Jose principles, the Organisation for Economic Co-operation and Development (OECD) principles for artificial intelligence (AI) and the proposed European Union (EU) Artificial Intelligence Act. The authors argue that AI tools can revolutionize AML/CFT and asset recovery, but there is a need to strike a balance between optimizing AML efficiency and safeguarding fundamental rights. Design/methodology/approach – This paper draws on reports, legislation, legal scholarships and other open-source data on the digital transformation of AML/CFT, particularly the deployment of AI in this context. Findings – A new regulatory framework with robust safeguards is necessary to mitigate the risks associated with the use of new technologies in the AML context. Originality/value – This study is one of the first to examine the use of AI in the AML/CFT context in light of the FATF San Jose principles, the OECD AI principles and the proposed EU AI Act.