FCA Reveals Use of AI in Identifying Sanctions Breaches Amid Growing Fraud Concerns

One of the UK’s leading financial regulators, the Financial Conduct Authority (FCA), has unveiled its use of artificial intelligence (AI) to detect potential breaches of international sanctions. Andrea Bowe, Director at the FCA’s Specialist Directorate, highlighted the regulator’s increasing reliance on technology during a recent event in London.

“Technology is transforming fraud and money-laundering detection,” Bowe remarked. She also raised concerns about the growing sophistication and scale of identity fraud due to AI advancements. According to Bowe, AI could soon be employed to clone people’s voices and faces, which would make it “increasingly difficult to distinguish between genuine and fraudulent interactions.”

She specifically addressed the threat posed by deepfake scams, stating that while they remain in their “relative nascency,” the industry “cannot afford to be complacent to their potential threat.”

However, AI is not solely a tool for criminals, Bowe emphasized. “We have shown how it can work,” she said, revealing that the FCA developed an AI tool to help identify potential sanctions breaches following Russia’s invasion of Ukraine.

Bowe also underlined the FCA’s desire to collaborate with the industry in combating financial crime. Despite some positive signs indicating a reduction in fraud, she cautioned that scam-related complaints in the UK had surged to their highest level since early 2018. “It is too early to be definitive that this is part of a longer-term pattern. But these statistics show, perhaps, that losses are stabilising,” she noted, adding, “If that is true, it is no mean feat given the fast-evolving nature of fraud typologies.”

Andrea Bowe has been confirmed as a speaker at the upcoming ‘International Anti-Financial Crime Summit 2024,’ which is scheduled to take place in London on October 9.

By fLEXI tEAM