As the COVID-19 pandemic continues to wreak havoc around the world, banks and other financial institutions are re-examining their business continuity plans in order to build greater corporate resilience and more sustainable processes.
To ensure the safety and well-being of their employees, many banks have initiated or expanded flexible working arrangements that have resulted in more and more employees working from home. Though necessary, this has surfaced underlying weaknesses in various areas of the business that previously relied upon legacy systems and lower-cost options.
The first risk the current environment has exposed is that many banks were offshoring various compliance functions to lower-cost regions. However, in many instances, the employees, who are now working from home, may not have the same internet access or any access at all. This changes the original operational risk model and potentially undermines previous efficiencies.
The second risk that COVID-19 has surfaced is tied to the increased volume of electronic communications. Various reports have cited the unprecedented growth in chat, phone, and email communications due to the exploding number of remote workers. Within all of these communications, there are risks. Inevitably any increase in alerts of the order being reported means that compliance teams are seeing an exponential increase in false positives. As a result, compliance teams are overwhelmed and will very likely miss key alerts.
The third risk highlighted by work-from-home arrangements is increased opportunity for unscrupulous employees to avoid monitoring and surveillance. While it is clear that the vast majority recognise the need to adhere to the strict policies of the company, it is inevitable that opportunities will open for others to exploit the situation who might otherwise not have done so.
Now, more than ever, forward-thinking organisations recognising that there are positive lessons to be learned must thoughtfully consider and implement advanced technologies and new processes. These will be focussed on reducing the risks above and reduce any future impact stemming from similar market conditions and work environment changes.
For instance, by leveraging Artificial Intelligence and machine-learned models, banks can help automate rudimentary workflows, augment humans to improve significantly their productivity and increase operational efficiency.
Based on our own deployments at some of the largest banks in the world, our machine-learned models have, in some instances, reduced false positives by up to 95% and have increased true positives by 300%. Furthermore, AI-powered solutions can enable companies to understand the nuances and actual context of human communications, whether voice or text, and deliver a better service to their customers.
Although the examples I’ve cited are mostly related to conduct surveillance and identifying risks, the same technologies can help spot positive opportunities to increase revenue and deliver impactful results.
I believe that in the aftermath of COVID 19, not just banks but all companies will need to reassess how they operate in the future. Those that adopt advanced technologies, like AI and machine learning, are far more likely to create greater corporate resilience and sustainability in their organizations. Those financial institutions that don’t implement these technologies will imperil their companies with increased regulatory risks and lost opportunities.