Adoption of New Technology for Identifying Money Laundering : An Exploration of Artificial Intelligence’s Usability in Banks to Combat Money Laundering and Terrorist Financing

Sammanfattning

As money laundering is a global threat, with approximately US$800 billion to US$2 trillion being laundered yearly, it is important to come up with new and stronger solutions to combat illicit activities. Among the most exploited entities for money laundering are financial institutions, and more specifically banks. Therefore, the purpose of this thesis has been to investigate the usability of Artificial Intelligence (AI) as a decision-maker in the Anti-Money Laundering (AML) department to combat money laundering and terrorist financing. Moreover, the main research question was to explore the usability of AI as a decision-maker within AML operations. To enable this, an important aspect was to understand what regulatory and compliance requirements are demanded on AI from the AML departments. Thereafter, it was necessary to understand AI’s technical functionalities to facilitate the department’s daily operations. The literature review presented the fundamentals of AML and their precautionary actions. Furthermore, in the second phase of the literature review, the fundamentals of AI were investigated. Lastly, a combination of the topics of AML and AI were reviewed to identify techniques that the AML department can implement. Moreover, the methodology of the thesis consisted of a qualitative research design with an inductive approach. In the findings, a framework was constructed from the obtained results (second order themes). Subsequently, those themes were further developed into aggregated dimensions, which were extensively elaborated on in the conclusion. Thereafter, the dimensions were categorized into either the compliance criteria or the functional criteria. Also, the dimensions were presented in the order of priority based on how critical they are. To answer the main research question, AI is usable in the AML department as a decision-maker when considering the aggregated dimensions. Essentially, AI can successfully be implemented into the AML department’s daily operations when all the dimensions are achieved.