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OCBC partners AI fintech ThetaRay to detect suspicious fund flows

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The bank decided to try out the technology with ThetaRay after OCBC’s fintech unit The Open Vault looked through as many as 800 alerts.

OCBC Bank is raising the bar on using artificial intelligence (AI) and machine learning to combat financial crime, as it works with an Israeli fintech to boost the bank's operational efficiency and accuracy in the detection of suspicious transactions.

It said on Tuesday that it would extend its proof-of-concept testing with fintech firm ThetaRay, after early tests showed that the fintech's technology was able to reduce the number of alerts that did not require further review, by 35 per cent.

And by categorising more effectively the flagged transactions by their risk levels, the accuracy rate of identifying suspicious transactions increased by more than four times, the bank said. The test was based on one year's worth of OCBC corporate banking transaction data, with the data anonymised.

OCBC said that it is the first bank to tap AI and machine learning to combat financial crime.

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The latest effort has helped the bank to prioritise the flagged transactions according to the ensuing risk. OCBC's head of group legal and regulatory compliance Loretta Yuen said that the current transaction monitoring system is a rule-based one, which makes the scanning of risks very fixed and handled on a "first in, first out" basis.

By embedding the fintech's technology into the existing system, some 4,200 alerts have been grouped into 48 unique risk clusters for the compliance team to sieve through.

The bank decided to try out the technology with ThetaRay after OCBC's fintech unit The Open Vault looked through as many as 800 alerts.

The bank targets to fully implement the technology in the second quarter of next year.

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