Tech Predictions 2020:
Insights from senior associate Ellen Lake on cyber skills, data breach fines and AI and financial crime
19 February 2020
Ellen Lake, one of our Tech Group senior associates, outlines her thoughts on AI and financial crime and shares her 2020 tech predictions, exploring key themes including cyber and data skills shortage in 2020, bigger fines for data breaches, ICO enforcement powers and dawn raids.
I am interested to see the impact of AI in respect of financial crime. I expect to see criminals continuing to employ increasingly sophisticated technologies like machine learning to find and exploit weak points in businesses' security systems, and also to assist in concealing illegal behaviour like money laundering.
To counter this, in 2019 we saw a number of high profile announcements about major financial institutions partnering with third party providers to employ machine learning to detect and prevent illicit activity and I expect this to continue. What I am particularly interested to see in 2020 is how technology can progress with respect to systems combining machine learning with statistical analysis to predict attacks and prevent criminal property being laundered through the financial system.
However, I predict that we will see regulated firms struggling to effectively communicate to their regulators what that machine learning is, how they are managing the risks, and what the systems and controls around use of machine learning are. And while the technology can be outsourced to a third-party provider, and often is with respect to financial crime systems and controls, remember that the responsibility remains with the regulated firm. I expect to see regulators firing warning shots as a result, challenging firms to explain how, for example, they are managing potential bias in the AI models they are using which could lead to missed threats or facilitation of money laundering - or to unfair treatment of certain types of customers.
To hear more, watch Ellen video below.