OCBC Bank is running pilot trials of technology from two fintech startups that use machine learning tools to sift through trading data in search of suspicious activity.
The companies - Scila and Cardabel - were two of eight startups to pick up pilots with the bank having emerged from an annual 'Tov Innovation Challenge', run by OCBC's innovation unit.
OCBC says the applications augment the capabilities of internal audit teams, who have to manually check huge volumes of data as a last line of defence against unusual trading patterns. The bank says it can take an auditor up to three months to complete an audit of trading activities.
Sweden's Scila runs through a checklist or more than 100 market abuse indicators to flag up anomalous trading patterns, while Cardabel from France uses unsupervised machine learning to detect both known and unknown types of trade anomalies.
Goh Chin Yee, OCBC Bank’s head of group audit, says: “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. AI has shown an ability to not just analyse huge volumes of data and generate meaningful insights but be a powerful tool in identifying the unknown-unknowns in trade anomalies.”
Since TOV’s inception in 2016, it has engaged over 1600 Fintech companies. Some of the digital tools that have moved into production include OCBC Bank’s AI-powered home and renovation loan chatbot service Emma and a transaction monitoring system which utilises AI and machine learning to combat money laundering.
This year's challenge saw different departments of the bank engage with eight startups over a twelve week period.
Pranav Seth, OCBC Bank’s head of e-business, business transformation and fintech and innovation group, says: “While the Challenge has allowed us to find ways to improve our internal capabilities with artificial intelligence to bring greater value to our customers, it is just the tip of the iceberg. The broader vision for us is to see to fruition the transformation of every element of the business from customer-facing operations to back-end processes.”