California-based HNC Software has introduced new software to help banks detect money laundering.
The Falcon for Money Laundering detection system utilises profiling analytics to examine transactions and detect money laundering activity and meet regulatory requirements. The system is based on HNC's neural software for detecting payment card fraud.
A recent report by TowerGroup labels money laundering as "one of the world's largest businesses" and notes that roughly $1 trillion is laundered annually; about half of which passes through the United States. The report says the problem will grow especially in Europe and Latin America in the years ahead.
"Criminals are becoming increasingly sophisticated in their money laundering tactics and use of advanced technology, making money laundering progressively more difficult to detect. In addition, as Web-based payment products and services expand, the opportunity for new and creative money laundering activities will continue to increase," warns Breffni McGuire, senior analyst with TowerGroup.
McGuire continues: "Neural network solutions, especially those incorporating rules-based engines, offer financial institutions a very powerful tool to understand customer behavior and differentiate between legitimate and potentially criminal activity."