- OCBC Bank
Oversea-Chinese Banking Corporation (OCBC) Bank has piloted two financial technology (Fintech) solutions which use Artificial Intelligence (AI) tools to increase the productivity of auditors and the quality of audit processes.
During the audit of trading activities, the AI solutions help to better detect trading anomalies by analysing trade data using machine learning algorithms.
Ms Goh Chin Yee, OCBC Bank’s Head of Group Audit, said: “As new risk trends and anomalies continue to emerge for activities in the dynamic global markets, there is a pressing need for us to proactively and accurately identify and respond to them in an efficient and effective way.”
The two Fintech companies that OCBC Bank has engaged are Scila and Cardabel.
Sweden-based Scila has developed more than 100 market abuse indicators that their clients can leverage. Exceptions flagged and investigated can be fed into their supervised machine learning system to refine the market abuse parameters.
Cardabel, a Fintech company based in France, uses unsupervised machine learning to detect both known and unknown types of trade anomalies.
Currently, the bank monitors trading activities on multiple fronts to detect potential trade anomalies: risk and control units conduct daily checks, and trained internal auditors are the last line of defence.
The latter, however, can take up to three months to complete an audit of trading activities because it takes time to extract and sort voluminous trade and market data. After which, manual analysis is done to detect potential irregularities based on a set of pre-determined indicators. Thereafter, the auditor will investigate the irregularities.
With these new AI solutions, the Bank expects to reap benefits such as a greater ability to integrate data sets and analyse them quickly, and the ability to attain better insights that were previously unknown to the auditor, such as identifying ‘unknown-unknowns’.
OCBC Bank’s Fintech unit, The Open Vault at OCBC (TOV), organises an annual challenge where selected Fintech companies present their solutions to the OCBC Community. Scila and Cardabel were among eight that were shortlisted to be part of the 2018 TOV Innovation Challenge.
Besides the pilot tests with Scila and Cardabel, OCBC Bank also completed pilot tests that leverage AI with the six other Fintech companies as part of the programme — Icekredit (China), Squirro (Switzerland), Lang.ai (Spain), vPhrase (India), EZMCOM (USA), Ondot (USA).