Across Asia Pacific and around the world, law enforcement agencies (LEAs) are deploying a range of new technologies to assist their anti-money laundering/counter-financing of terrorism (AML/CFT) operations. Next-generation platforms that utilise artificial intelligence (AI), machine learning and distributed ledger technologies, among others, offer a myriad of benefits for LEAs — including enhanced capabilities to identify complex cases, reduce false positives, enhance the traceability of transactions and make it easier to identify criminals.

In 2021, the Financial Action Task Force (FATF) published comprehensive guidance related to the adoption of new technologies for AML/CFT1 which included use cases from Hong Kong, Singapore, and other major Asia Pacific financial hubs. The FATF followed this initial guidance with additional strategic considerations for AML/CFT digital strategy in May 2022, including specific operational, legal and ethical questions that LEAs should be asking.2 The FATF has also been encouraging information sharing between the public and private sectors.3 As FIs work towards implementing the updated FATF guidance in their AML/CFT operations, LEAs must be prepared to utilise new technology tools to work together with the private sector to successfully detect suspected illegal activity. To do this, they will need to address and overcome the operational changes that come with rolling out sophisticated, technology-driven platforms.

Regulators are also starting to take actions to encourage FIs to share information with each other and work with regulators to build a more effective AML/CFT ecosystem.

For example, Singapore has announced plans to launch COSMIC, a centralised digital platform co-developed by Monetary Authority of Singapore (MAS) and six major commercial banks, in the first half of 2023.4 The development of similar platforms in other Asia Pacific markets will require governments to address a range of challenges and risks: including adapting to ongoing regulatory developments, ensuring data security and integrity, and facilitating coordination between government departments and FIs to meet implementation timeframes.

This brief outlines the challenges and opportunities that LEAs face with regards to upgrading their AML/CFT monitoring and detection platforms; provides an overview of the key features of next-generation platforms; and examines the benefits of choosing the right technology partner.

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