Supporting the Combating of Financing of Weapons of Mass Destruction with AI Technologies☆

The anti-money laundering and combating the financing of terrorism compliance obligations are becoming increasingly complex for large banks. To meet these obligations, these banks are increasingly relying on regulatory compliance technologies, also known as”regtech”. The use of AI technologies enhances the ability of regtech to perform complex tasks such as rating customer risk and identifying potential suspicious transactions. With the adoption of new risk assessment and risk mitigation standards for proliferation financing (PF) of weapons of mass destruction, there is a greater need for appropriate and improved regtech. This paper provides an overview of the development of these standards, their relationship with AML/CFT standards, and the common areas where regtech can be applied to meet AML/CFT obligations. It also highlights some of the legal risks associated with relying on regtech in this space. Regulators, compliance officers, and technologists must navigate these risks to ensure that appropriately-designed regtech can be used to increase global financial integrity and security.