In the US, the cost of anti money laundering (“AML”) compliance is estimated at $23.5 billion per year. European banks come close with an estimated $20 billion spent annually. This spend goes towards technology, operational processes, people and legal / consulting costs.

Within the financial crime domain, fraud is a further significant cost area. While sometimes representing less of a direct compliance risk, fraud may result in losses, foregone revenue and remediation costs. Fraud (or false positives identified by a fraud system) also usually result in a negative customer experience. …


Managing ever evolving financial crime threats and meeting associated compliance requirements is operationally demanding and costly for financial institutions. Technology — including AI — has enhanced detection capabilities, reduced false positives and enhanced the productivity of staff supporting case investigations, Know Your Customer (KYC) processes and more. And end-to-end digital onboarding for retail customers has become a reality in many markets. And yet, there are still gaps to close and efficiencies that may be derived from collaboration between financial institutions.

Regulators in many parts of the world have recognized the need for some form of intelligence sharing— particularly for Anti-Money…


Leading financial services organizations have seen the value in curating an ecosystem of financial services delivered by themselves and selected partners that meet the niche requirements of their customers and increase customer relevance and revenue. This advance has been encouraged by the broad Open Banking momentum gaining traction around the world — both at the regulatory level and the broader philosophical level. At the same time, opportunities to be part of ecosystems in other industries abound. …


For financial services firms, fraud is not just a cost and a regulatory concern: each false positive or false negative also represents a disruptive experience for the customer.

Unsurprisingly, enhancing fraud detection is an ongoing priority — and many firms have turned to advanced analytics and machine learning models to deliver improvements. In fact, fraud detection has shown up as the number one use case for machine learning and AI in banking in a number of surveys. Vendors are building machine learning and AI into their fraud detection products and banks have been experimenting building their own models.

Common to…


Authentication and security aimed at preventing account takeover, card fraud and more are often top of mind for financial services organizations — particularly with approaching deadlines for Secure Customer Authentication (SCA) in Europe. Approaches are often the result of a trade-off between customer experience and security that may be noticeable to those who use services from multiple providers or across multiple countries. This was evident in the low uptake in markets like the US of 3D Secure for online card payments — where ecommerce merchants were willing to pay higher interchange fees to avoid customer inconvenience and cart abandonment. 3D…


Loan default prediction and collections aren’t always showcased at the leading edge of digital transformation. Nevertheless, efficiency in these processes for lenders (or their service providers) has a direct impact on the bottom line. These capabilities wait to be tested when an economy softens.

Automation of case management, legal processes, credit agency interaction and similar has typically been where most providers have invested technology effort. Solutions are often localized to align with local lending and legal processes.

Basic segmentation is also sometimes performed semi-manually — particularly for small business lending, where industries that experience an easily identifiable downturn (for example…


Payments mechanisms for individuals — for payments to merchants and between individuals — are evolving fast worldwide. Solutions are often difficult to differentiate in their execution, so it’s useful to compare their features from time to time. This article provides a basic primer on more common modern payment mechanisms and recent developments. Future articles may focus on specific solutions or market participants.

One way of categorizing payment mechanisms may be as follows:

1. Physical card presentation solutions that involve presenting plastic including swipe, chip and pin, tap and go. Authorization and clearing / settlement follow traditional routes from the acquring…

Rupert Nicolay

In my role at Microsoft I define blueprints for what our Services teams worldwide do to help our Financial Services customers achieve more. Views are my own.

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