Applying FL to the financial sector
In the US alone, financial services firms spend billions of dollars every year on compliance to combat laundering, yet the current system is so ineffective that less than 1% of money laundering activities are thwarted. In fact, it’s estimated that firms spend roughly 100 times more money than they are able to recover from this criminal activity. Only a small percentage of transactions are caught by anti-money laundering (AML) systems, and an even smaller percentage of those alerts are eventually reported in suspicious activity reports (SARs), as required by the Bank Secrecy Act (BSA) of 1970.
Conservatively speaking, the value of information coming from a network of banks is many times higher than the information any one bank has. This is because you can see not just where the money came from, but also where it went.
Anti-Money Laundering (AML)
The current AML system needs major improvements, with several challenges that need to be...