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Rival bank Bunq wins "landmark" AI AML lawsuit against Dutch central bank

A Dutch challenger bank has won a "landmark" win over the country's Central Bank (DNB) in relation to the usage of artificial intelligence (AI) for its AFC procedures.

The Dutch Central Bank initially prohibited Bunq from using AI and machine learning to conduct AML monitoring, prompting the bank to sue the Central Bank.

According to FinExtra, Bunq's decision to sue the DNB was motivated by the potential "long-term loss" to its consumers and the stability of the banking system in general if it had "yielded to DNB's anti-money laundering approach."

Bunq stated in a statement that DNB's AML attitude was "antiquated and ineffectual," in contrast to the firm's usage of "modern technology such as AI to manage risks."

The bank added: “Where DNB insisted on using one-sided reporting from account holders – a system resting squarely on the honesty of fraudsters – Bunq favoured the use of technology such as machine learning to fight money laundering effectively.”

Bunq CEO and founder Ali Niknam said: “We made history today. The court has paved the way for progress.”

He added: “It is good to see that there are independent judges who keep supervisory bodies such as DNB in check.”

Mr Niknam said in a statement that the verdict today was a "milestone" in the firm's efforts, clearing the door for "development that will make banking safer for everyone."

“It enables broader cooperation between the financial industry and online players, as effectively tackling fraud can only be done if these work together,” said Mr Niknam.

The Trade and Industry Appeals Tribunal concluded in the one-of-a-kind decision that DNB could not demonstrate how Bunq's AML practises violated Dutch law.

Despite its decision, the Tribunal agreed with DNB's assessment that the challenger bank should have done more research into customers' sources of funding and paid more attention to PEPs, according to FD.

DNB has stated that it will further examine the judgement and will respond later in the day.


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