Artificial intelligence: accelerator or panacea for financial crime?

Abstract

PurposeThis purpose of this viewpoint is to address the intended good and unintended bad impacts of artificial intelligence (AI) applications in financial crime.Design/methodology/approachThe paper relied primarily on secondary data resources, business cases and relevant laws and regulations, and it used a legal-economics perspective.FindingsCurrent AI systems could function as antidotes or accelerator of financial crime, in particular cybercrime. Research suggests criminal law could be applied via three approaches to curb these cybercrimes. However, others considered this to be an inappropriate mechanism to hold AI agents accountable, as present AI systems were not deemed capable of making ethically informed choices. Instead, administrative sanctions would be considered more appropriate for now. While keeping vigilance against AI malicious acts, regulatory authorities in the USA and the UK have opted largely for the innovation-friendly, market-oriented, permissionless approach over the state-interventionist stance so as to maintain their global competitive edge in this domain.Originality/valueThe paper reinforced the growing arguments that AI applications should be deployed more as panacea for financial crimes rather than being abused as crime accelerators. There equally though is the need for both public and private sectors to be mindful of the unintended negative, harmful consequences to society, especially those connected to cybercrime. This implied the further need to beef up attention and resources to help mitigate these risks.

Why ethical audit matters in artificial intelligence?

“…If a person knowingly develops and deploys a machine working on the principles of AI to fulfill his desires which are dangerous to human rights, such developers should be held accountable for his misdeed. A fraud, done by creating a machine which is behaving in a way that ordinary people may be cheated easily is a prima facie violation of the human right and also fulfill the two conditions which are the intention and proved fault [33].…”

Artificial intelligence techniques in finance and financial markets: A survey of the literature

“…Perhaps, administrative sanctions are required to control the unintended effects. Regulatory authorities in the United States and the United Kingdom have chosen an innovation-friendly, market-oriented, permissionless approach over the state-interventionism to maintain their global competitive strength (Yeoh, 2019). Couchoro et al (2021), in this journal issue, stress the importance of introducing AI for controlling information and communication technologies (ICT) in the financial sector to reduce the risk of money laundering and increase security investments in Sub-Saharan Africa.…”

Paradigm Shift In Indian Banking Industry With Special Reference To Artificial Intelligence

“…New AI Landscape opportunity in banking is detection of fraudulent online transactions which has provided exact and unrivalled outcomes with the mediation of artificial intelligence. It is one of area of major concern in banking where machine intelligence frameworks have exceeded expectations (Yeoh 2019). Falcon fraud assessment system has deployed data analytics in banking and is based on a neural network shell for fraud detection.…”