HSBC ties up with Artificial Intelligence startup

HSBC partners with AI-related startup!

As money-laundering issues increasingly surface, HSBC Holdings PLC has joined hands with Ayasdi Inc, a Silicon Valley based startup in artificial intelligence space. The move is aimed to automate some of its compliance processes and prove its efficiency in due course.

Andy Maguire, chief operating officer of HSBC said that this banking group was implementing AI technology to combat money-laundering issues, conducted by people over the years. “It’s a win-win. We reduce risks and it costs less money,” adds Marguire.

The banks do not find anything suspicious in the increasing number of anti-money laundering investigations that result into a waste of resources, according to Ayasdi Inc.

In a pilot of Ayasdi’s technology, HSBC has seen the number of investigations drop by 20 per cent sans reducing the number of cases referred for more scrutiny, according to the startup.

Over the last year, banks have been proactive about incorporating AIs and automation, in order to save money and time, ranging from compliance checks up to customer services. They have been working with the financial technology companies as well to reduce the amount of technology that is built in-house.

A collaboration called ‘regtech’ comes as a significant mention, a technology that helps financial institutions to stay in compliance with regulations and be avoid of heavy fines in money laundering or marketing business.

In a recent incident, HSBC has even agreed to pay a fine of $1.92 billion to the US authorities so that it could be allowed to wash out drug money out of Mexico and other compliance lapses.

To meet the standards with this increased regulatory scrutiny, banks went on a compliance hiring spree after financial crisis hit the market.

Maguire further said that anti-money laundering checks was a "thing that the whole industry has thrown a lot of bodies as it because that was the way it was being done.”

With some of the tasks getting automated, banks have recently done away with compliance hiring.

AI technology could surely assist in compliance, as Maguire feels it has the capacity, “to do things human beings are not typically good at like high frequency high volume data problems” or augment 'human capabilities.'

Gurjeet Singh, Ayasdi’s Executive Chairman and co-founder, was appointed to HSBC’s new technology advisory board in January. The advisory board is responsible for advising and guiding the bank on matters of digital strategy.

With AI gaining a huge momentum in the service sector off late, do you feel it could eat away jobs? Let’s wait and watch.

Source: Reuters