How AI is increasing financial crime risks for wealth managers

Caroline Black, Consultant at Gherson Solicitors LLP, has been quoted in Law360 in an article examining how the increasing use of Artificial Intelligence by wealth managers could amplify financial crime and regulatory risks.

The article, “AI Use By Wealth Managers Ramps Up Financial Crime Risk”, considers the implications of growing AI adoption against the backdrop of weaknesses identified by the Financial Conduct Authority in financial crime controls at some UK wealth managers. It examines how inadequate KYC information and poor-quality data could undermine the effectiveness of AI systems, while also highlighting risks associated with AI-enabled fraud and cyberattacks, unauthorised use of AI, third-party vulnerabilities and the ability of compliance teams to keep pace with increasingly sophisticated technology.

Commenting on the increasing sophistication of AI and its potential use in financial crime, Caroline said:

“As AI becomes more sophisticated, the response to those who may use it to commit financial crime must become equally sophisticated”.

Caroline further noted that organisations responsible for financial and other sensitive personal data must remain at the forefront of responding to these risks or potentially face significant regulatory or civil penalties.

Read more in Law360: “AI Use By Wealth Managers Ramps Up Financial Crime Risk”.