Banks Adopt AI and Stablecoins Faster Than Compliance Can Keep Up
Watch more: What’s Next in Payments With Flagright’s Chris Phillips A little paranoia may be useful when the technology moving money changes faster than the controls designed to police it. That is the premise Chris Phillips, director of Financial Crime Industry Engagement at Flagright, brought to a PYMNTS “What’s Next in Payments” interview centered on […] The post Banks Adopt AI and Stablecoins…
The rapid adoption of artificial intelligence (AI) and stablecoins in the financial sector is outpacing the ability of compliance systems to keep up, warns Chris Phillips, director of Financial Crime Industry Engagement at Flagright. In an interview with PYMNTS, Phillips emphasized the need for a healthy dose of paranoia to navigate the rapidly changing technology landscape.
He stressed that AI's unique nature, with its multiple agents for various financial functions, presents significant risks due to fragmented controls, governance, and audit trails. The emergence of stablecoins also poses challenges, as their integration into traditional banking systems has been faster than the industry's ability to understand monitoring issues, such as "chain hopping" across blockchains.
Both AI and stablecoins necessitate a cohesive governance framework and a unified platform for financial crime compliance, with clear audit trails and access controls. While automation can assist in certain tasks, compliance officers must remain vigilant and understand the financial crime typologies and the underlying technology to ensure effective oversight.
Phillips advised financial crime professionals to stay curious, understanding their technology's capabilities and limitations rather than assuming that installing an AI or agent resolves all issues.
Written by urgent.news from PYMNTS's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
