The two biggest Nordic banks have both recently beefed up their compliance units significantly. Both say the extra headcount is temporary.
Nordea Bank Abp has hundreds of employees who scrutinise billions of transactions in order to catch anything that looks potentially criminal. It’s a costly, inefficient system that Mikael Bjertrup, head of the bank’s financial crime prevention unit, plans to change.
Bjertrup says that about 20 percent of suspicious alerts are currently closed by algorithms, based on machine learning, with the rest still being handled by humans. He wants to see those numbers reversed so that algorithms handle 80 percent.
With labour accounting for roughly three-quarters of the cost of complying with anti-money laundering requirements, Nordic banks are figuring out how to replace people with artificial intelligence, algorithms and automated customer screening. They say a key frustration now is that the authorities are struggling to keep up, after banks plowed huge amounts of money into their risk controls.
The focus is on finding ways to become more efficient. Bjertrup said his team of about 1,000 people has to wade through the billions of transactions done each year in a process that, for the industry as a whole, is “extremely inefficient.” He also says that “more than 90 percent of all the investigations end in perfectly good explanations.”
“We’ll be fewer people in the future, but our defense will be better,” he said. “We won’t need as many as 1,500 employees in the future, as technology improves.”