UBS goes high-tech to fight money laundering

Bernhard Warner

LONDON: Swiss bank UBS AG said on Monday it would use a British technology

firm's artificial intelligence software to monitor all banking transactions in a

bid to thwart money laundering.

Banks have faced mounting pressure from politicians and law enforcement

authorities to crack down on money laundering in the wake of last September's

attacks in the United States. In January, a dozen of the world's largest

financial institutions, including UBS, pledged to clamp down on funds that could

be used to finance groups with violent aims.

As a result, banks have stepped up investment in anti-money laundering

measures, and many of them are increasingly turning to the latest technology to

automate the process. "UBS decided to enhance its transaction monitoring to

better address the rapidly changing banking demands we are experiencing

worldwide," Hans-Peter Bauer, chief risk officer of UBS Switzerland, said

in a statement.

UBS hired Searchspace, a London-based technology firm that has developed

technology, which can pinpoint suspect transactions within vast data flows for

financial institutions. The London Stock Exchange, for example, uses

Searchspace's artificial intelligence software, dubbed Intelligence Enterprise

Framework, to detect particular market abuses, such as insider trading and share

price ramping activities.

UBS, which logs millions of transactions per day, will deploy Searchspace's

digital anti-money laundering sentinels to flag suspicious movements of funds

through the bank. Searchspace Chief Executive Jason Kingdon explained the

software will tag any anomalous transactions by UBS customers and report them to

bank authorities.

The software, he said, compares a particular transaction with the customer's

past transactions and the transactions of a peer group of customers to determine

if, say a withdrawal of $10,000, is worthy of further review.

"It's not about trying to turn the organisation into a customer

transaction investigation unit," said Kingdon. "It's about trying to

manage risk."