Embracing Change: NICE Actimize on Generative AI, Cloud and the Future of Financial Crime

Readying the launch of new solutions that focus on the benefits of generative AI, Craig Costigan, NICE Actimize CEO, discussed with Global Banking & Finance Review Editor Wanda Rich what lies ahead for global financial institutions as they address transformation created by the collision of new technologies, increased regulation, and heightened challenges brought by emerging fraud typologies and increasing sanctions.

As the industry leader in financial crime and compliance solutions and a pioneer in AI, machine learning, and collective intelligence, NICE Actimize delivers solutions that leverage innovation to mitigate risk, empowering clients to comply with confidence. Focusing on these differentiators, Costigan offers a sneak peek into his organization’s plans and outlines the steps financial institutions must consider to be successful in 2024.

As we launch a new year, financial institutions are dealing with decisions regarding significant shifts in how their operations and businesses are run. What critical changes impact financial institutions that require unique strategies and focused management decisions?

Costigan: This year marks a perfect storm – from movement to the cloud to the emergence of next-generation technology targeting efficiency and speed to how a culture within a financial organization will have to change to accommodate these shifts. The transition to the cloud continues to create a need for a fresh look at the operational strategies that financial institutions have embraced.

As financial institutions move from traditional legacy systems to cloud-based, they take a huge burden off their IT staff with a SaaS solution. The SaaS approach provides speed and scale that can adapt – the endless power of compute comes with the cloud. That means you have the operational ideals to be agile and change your sanctions programs quickly, as one example. Now, you have the speed and agility to get it done because you can shift quickly when necessary. We have seen tremendous success in our cloud business because of these benefits.

Q: Creating the infrastructure needed to accommodate modern AI systems may seem a tall order. Where should financial institutions begin their assessment journey?

Costigan: It isn’t a tall order if you don’t go it alone. We are seeing many organizations move to a SaaS solutions environment — a world-class software provider can lead you efficiently to where the provider handles all of the infrastructure. This is the optimal way that proves to be more cost- and time-efficient – for example, you won’t have to source hardware or search for microservices.

Q: What role will Generative AI play in transforming financial crime this year? Can you name a few use cases you see assisting financial institutions in reducing time to value, lowering costs, and meeting regulatory compliance requirements more effectively?

Costigan: Generative AI is a positive force to be reckoned with – anti-money laundering applications and fraud and market manipulation scenarios will all benefit from the cost savings that generative AI will usher in. I think generative AI will bring numerous targeted benefits to the applications and use cases they serve.

In the fraud area, an essential factor to keep in mind is that criminals of all types have already added generative AI capabilities to their bag of tricks. They have become experts at creating new obstacles for financial institutions and targeting customers with scams, account takeovers, and identity theft. From AI-generated selfies, fake documents, such as bank statements or government letters, cloning a person’s voice, or generating deepfake videos to engage in phishing or blackmail, criminals have created many ways to fool consumers and businesses.

We are leveraging AI to help institutions evolve financial crime and compliance team roles, focusing on strategy and oversight while AI handles the heavy lifting and manual tasks. 

Q: What are NICE Actimize’s plans for new solutions launches this year in generative AI?

Costigan: NICE Actimize is stepping up with aggressive plans in the area of generative AI, and we will launch several generative AI solutions early this year, already leading the industry with several patents pending that address this space. One of the first offerings will be Generative AI for Suspicious Activity Reports (SARs), which shows where generative AI can provide value in regulatory compliance. Financial institutions must file SARs with regulatory bodies when they detect suspicious financial activity. However, the current process for filing SARs is manual, time-consuming, and error-prone.

Generative AI can automate the generation of this narrative by providing clear, concise, and compliant written summaries of the suspicious activity. This automated approach streamlines the SAR filing process and ensures accuracy and consistency. This will provide significant time savings while reducing the risk of regulatory penalties and reputational damage.

We will also provide a way for analysts to start smart – it will summarize the issue to be investigated and recommend the next best actions throughout the process to complete an investigation. This approach will provide significant time savings for financial crime investigation teams.

Q: How does NICE Actimize’s strength in artificial intelligence impact the firm’s approach to data management?

Costigan: Today’s availability of extensive third-party data sources can make gathering data time-consuming, introducing the risk of errors when manually collecting information. Advanced AI makes the data-gathering process faster and more effective.

Our AI-powered data intelligence offerings aggregate and orchestrate the collection of data, making it seamless and quick to access for financial crime teams to confidently assess the risk of a customer and make the right decisions. In addition, we leverage this intelligence to create consolidated entity profiles for faster decisions.

Q: What additional differentiators allow you to support financial institutions through these challenging times?

Costigan: Our robust analytics and AI capabilities position us well, providing insights from across the industry and injecting new features into models to stop emerging threats. We also fully support model governance to ensure standards are met before live production.

As we have seen fraud grow by double digits, our broad and deep Enterprise Fraud Management (EFM) coverage addresses all possibilities: New Account Fraud, Mule Detection, Scams and Authorized Fraud, Account Takeover, and Login & Account servicing. Our scalable, flexible, and high-performing real-time fraud prevention and management platform has already been proven with the largest Tier-1 financial institutions. And our strong install base in Tier-2 and Tier-3 financial institutions further demonstrates our platform’s ability to scale up and down based on segments, use cases, and regional needs.

In transaction monitoring systems, NICE Actimize’s AI/ML-based advanced segmentation, tuning optimization, and predictive analytics have enabled customers to achieve increased efficiencies in their AML programs. Customers adopting these models have consistently seen a 40% reduction in false positives while maintaining a 100% accurate positive recall.

Q: What is NICE Actimize’s most significant accomplishment this year?

Costigan: While I am proud of so many accomplishments, the patents pending and patents granted for our AI inventions are world-class and indeed show that we are going after innovation full force to solve financial crime in new ways.

Coupled with our extensive investment in research and development, this pairing has guided us to deliver solutions that will provide financial institutions with the competitive differentiators they will need to fight financial crime today and tomorrow.