Shortly after reaching its all-time high, Nasdaq steps into the AML sector as it launched AI technology to detect money laundering.
On the 16th of September, the Nasdaq (NASDAQ: NDAQ) stock market recently unveiled plans to launch AI technology to detect fraudulent transactions. The Nasdaq’s new offering will help financial and retail institutions to easily detect illicit activity on their platforms.
Nasdaq Launches AI Technology
In the announcement, Nasdaq revealed plans to launch the AI technology to serve banks and other financial institutions. Upon the successful launch of the AI-based system, banks will be able to activate automatic anti-money laundering (AML) investigations.
Generally, monitoring systems for bank transactions flag multiple money laundering-related cases. According to Nasdaq, flagged alerts can be up to 300,000 monthly, as banks detect these fraudulent acts. In addition, Nasdaq said the process is manual and labor-intensive. Nasdaq also hopes that it’s AI technology will help banks and other financial institutions filter through the numerous alerts faster and cheaper.
Nasdaq’s AI technology will garner the data needed for an AML investigation and then analyze the information. For the analysis, the system will use software that copies human decision making.
Nasdaq’s head of AML technology, sell-side and buy-side solutions, Darren Innes, commented on the development:
“Banks are worried about that wide net because of the cost. We are giving them the opportunity to reduce that cost.”
Innes also added that the high number of alerts surged during the pandemic, as fraudulent activities also increased.
Notably, the launch of Nasdaq’s AI technology marks its emergence into the AML sector. The senior vice president at Nasdaq, Valerie Bannert-Thurner, commented on the company’s new move:
“We have been thinking long and hard on how we want to go beyond trade surveillance… It’s a product launch but strategically, it’s a launch beyond trade surveillance. We have great ambitions in the space.”
Bannert-Thurner is also the head of Nasdaq’s market technology sell-side and buy-side solutions.
Recent Nasdaq Highs
Over the weekend, AstraZeneca plc (NYSE: AZN) resumed trials for its COVID-19 vaccine in the UK. As the pharmaceutical company announced resumption for the phase-3 of its vaccine, global stocks rose. Amid positive news for a working coronavirus vaccine, Nasdaq-100 futures added 1.5%. At the moment, Nasdaq-100 is up 1.43%.
On Monday, CNBC reported that Nasdaq gained 1.87%, adding 203 points. This increase occurred after the stock exchanges lost for two consecutive days. On the same day, the Dow also added 327 points, a 1.18% increase.
As the lockdown eased in June, Nasdaq was one of the first indexes to rebound from the coronavirus pandemic’s negative effect. At that time, Amazon.com Inc (NASDAQ: AMZN) and Netflix Inc (NASDAQ: NFLX) stocks increased due to an increase in customers’ demand.
On the 2nd of September, Nasdaq reached its all-time high, reaching over 12,000 for the first time ever. Precisely, the index hit 12,056.44, a further recovery from its worst week in March.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.