Briefs

March 24, 2002

UBS Goes High - Tech to Fight Money Laundering By REUTERS

LONDON (Reuters) - Swiss bank UBS AG (news/quote) said on Monday it would use a British technology firm's artificial intelligence software to monitor all banking transactions in a bid to thwart money laundering.

Banks have faced mounting pressure from politicians and law enforcement authorities to crack down on money laundering in the wake of last September's attacks in the United States.

In January, a dozen of the world's largest financial institutions, including UBS, pledged to clamp down on funds that could be used to finance groups with violent aims.

As a result, banks have stepped up investment in anti-money laundering measures, and many of them are increasingly turning to the latest technology to automate the process.

``UBS decided to enhance its transaction monitoring to better address the rapidly changing banking demands we are experiencing worldwide,'' Hans-Peter Bauer, chief risk officer of UBS Switzerland, said in a statement.

UBS hired Searchspace, a London-based technology firm that has developed technology which can pinpoint suspect transactions within vast data flows for financial institutions.

The London Stock Exchange, for example, uses Searchspace's artificial intelligence software, dubbed Intelligence Enterprise Framework, to detect particular market abuses, such as insider trading and share price ramping activities.

UBS, which logs millions of transactions per day, will deploy Searchspace's digital anti-money laundering sentinels to flag suspicious movements of funds through the bank.

Searchspace Chief Executive Jason Kingdon explained the software will tag any anomalous transactions by UBS customers and report them to bank authorities.

The software, he said, compares a particular transaction with the customer's past transactions and the transactions of a peer group of customers to determine if, say a withdrawal of $10,000, is worthy of further review.

``It's not about trying to turn the organization into a customer transaction investigation unit,'' said Kingdon. ``It's about trying to manage risk.''