Podcast S3E5 | AI Re-imagines Financial Crime Risk: Elke Biechele

Podcast S3E5 | AI Re-imagines Financial Crime Risk: Elke Biechele

Podcast S3E5 | AI Re-imagines Financial Crime Risk: Elke Biechele 1400 788 Risky Women

Kelly-Ann McHugh interviews Elke Biechele, CEO of RisikoTek on moving from global corporate banking to central banking to running her own regtech startup.  Their AI Amalia is focused on tackling the $5trillion financial crime issue by raising detection levels from the current 0.01%.

Elke is a former global head in Risk Management having worked for some of the largest banks in the world. She worked in London, Frankfurt and Singapore. She held several Global Director positions at group level that included Investment banking, Private Banking and Retail Banking. She also worked for the European Central Bank during the time of eastern European country accession.

Show Notes

04:08 Career & Uncovering Scale of Financial Crime
10:49 Lessons Learned
13:20 Role Models
16:39 Starting RisikoTek
21:46 Silos & Data Protection
24:01 Amalia AI & Thinking Like a Transnational Money Launderer
35:03 Rants & Revelations
38:38 Rapid Fire Round

I found an individual, several individuals that are more wealthy than a whole country’s GDP…I’ve identified money laundering methods used to illegally shift millions of dollars through the bank. So I can honestly say that my real life is now more interesting than Netflix.

I think lesson number one is follow your dreams, no matter what people tell you, stay secure, and so on.

Episode Sponsor

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TRANSCRIPT

Kimberley Cole 0:01
This is Risky Women Radio – a show to connect, celebrate and champion women in risk, regulation, and compliance. Sharing insight and perspectives from the most influential members of our global Risky women network on the latest developments, we need to think about, the challenges we should all talk more about and the innovation we are most excited about governance, risk, and compliance. Bringing together the hundreds of senior women professionals already connected with a new emerging group of leading women and men. I’m Kimberley Cole, your chief risky woman.

Kelly-Ann McHugh 0:38
Good evening, and Good morning. Welcome to the Risky Women podcast, championing women in risk and compliance. I’m Kelly-Ann McHugh from MyComplianceOffice and today in this episode, we’re excited to bring you a fantastic leader in the AI and financial crime space of regtech. Today we will be discussing reimagining financial crime risk utilizing AI to enhance financial crime intelligence, where we will meet Amalia, the AI brain behind the detection of financial crime. Elke is the CEO of FinTech startup RisikoTek, a company she founded in 2018, with the aim of using artificial intelligence and big data to transform risk assessment of financial crime detection. They have developed Amalia, she is the brain behind financial crime detection. Elke is a former Global Head of risk management having worked for some of the largest banks in the world, to London, Frankfurt and Singapore. She has held several global direct positions at group level that included investment banking, private banking and retail banking. She also worked for the European Central Bank during the time of Eastern European country accession. Her core expertise is in risk, credit risk, data analytics, op risk and financial crime risk. She is a thought leader, an advocating more comprehensive risk models that take into account big data in an intelligent, high tech supported and calculated manner. She has a BSc and MSc in stats and psychology from Germany and an MBA in finance from London, an investment management deployment from the London Business School and various courses within Treasury risk and computer programming, to name a few. And she speaks regularly at industry conferences and she recently won a Kindness and Leadership Award from women of the futures 25 leading lights. Welcome to our podcast here today. Wow, what a bio.

Elke Biechele 2:38
Thank you very much.

Kelly-Ann McHugh 2:39
It’s a pleasure for us to have you with us here. And speaking to our network, we’re going to start off with going through a little bit around your career journey and how you’ve got here today. I’ve been just listening to your bio, it’s fantastic all of the study and the different roles and how you got into financial crime from credit risk. Tell us a little bit about your role now and what are your key responsibilities?

Elke Biechele 3:01
Yeah. So now now I’m the CEO of an innovative regtech startup. And that provides deep tech solution for the assessment of financial crime risk. So my key responsibilities cover a lot of them so they they cover all aspects of the business marketing, accounting, operations, system development, product development, legal, and HR as well. And all the hiring process. So in my banking career, I used to feel really under challenged you can only use like a small fraction of your all your skills now I feel that my limits have been well explored! And now it we’re drawing up on all my previous experience and skill, and I’m continuously learning new ones, which is fantastic.

Kelly-Ann McHugh 3:47
Absolutely. I’m sure that makes it all the more rewarding as well, because every input, you know, you’re seeing the real reward and output at the end.

Elke Biechele 3:55
Yeah, that’s true.

Kelly-Ann McHugh 3:56
So we’ve already heard from the bio a little bit around your question. journey. Take us a little bit on a journey with regards to that, how you started and how you ended up here and share some of the highlights to-date.

Elke Biechele 4:08
So after 20 years of banking career being locked away into air conditioned towers, and from my heart, I’m truly a nature lover. And so being born into this half a century where most of the deforestation takes place, and the animals disappear, and yet I’m sitting there being a nature lover, sitting in an air conditioned tower in the city, so I really wanted to do something else. And so after 20 years in banking, I’ve now taken a different approach. And with this approach, I’m thrilled that my career has now allowed me to address some of the issues also around wildlife and environmental crime, deforestation, because all of these have manifestation in financial crime. So they are done with corruption, bribery, and for the purpose of making lots of money based on illicit means. So I started out in the investment banking risk operations after I’ve moved from the UK. So from Germany, I studied in Germany and moved to the UK and then held several roles with businesses and technology domains. And my experiences altered between banking and consulting as well. And I’ve covered credit risk, market risk, operational risk. And lastly, also financial crime risk. And I have also seen banking from the corporate banks perspective from private and I even worked for the European Central Bank for three years in Frankfurt and had some experience in Zurich, Hong Kong and Singapore on the way to my career. So I’ve covered covered a lot of the globe. There were quite a few highlights that I would like to address. The biggest highlights of my career have taken place in just the the most recent years. It’s an eye opening experience setting up a business and defining my own direction is such an interesting field and such a rewarding field as well. So the financial crime is just so interesting. And I never knew before I did it that it’s just so widespread. The estimates, I think are 5 trillion. But yet, I found an individual, several individuals that are more wealthy than a whole country’s GDP. So it’s widespread, and all of us are somehow part of it, facilitating it. And so this has been really, really interesting. And so in the past working in a bank, I was mainly exposed to segmented parts of a risk management organization, were I met with internal management and colleagues to discuss company specific methods, inward looking specific matters. Now, I’ve exposure to many different areas in the detection of financial crime. Like I’ve identified terrorist links behind wildlife crime. I followed the trading routes in counterfeit medication activities, I’ve uncovered the trail of illicit imports and exports of goods. I’ve seen and detected cases of government corruption. I’ve identified parallel networks in offshore tax havens. And I’ve identified money laundering methods used to illegally shift millions of dollars through the bank. So I can honestly say that my real life is now more interesting than Netflix.

Kelly-Ann McHugh 7:15
Oh, my gosh, that’s so true. I mean, all of the documentaries, I’ve just seen that there’s, they’re looking to release one on the FIFA corruption case, actually, I don’t know whether it’s Netflix or somebody else’s. But like, there are a lot of financial crime shows that glorify I think a lot of these glorify, I mean, hopefully the one about FIFA corruption won’t but you know, there’s certain ones where you go errr. So I mean, at least you’re on the right side of financial crime, right. Helping detect it.

Elke Biechele 7:47
We are we’re making the right side more available to more people. To build up a global global understanding of how widespread this is.

Kelly-Ann McHugh 7:54
Yeah, I think you you raised some good points there right. Particular individuals whose net worth is more than the GDP of, say the country that they’re from, or other countries etc. Like, I mean, how does that work? And then unfortunate things like identifying terrorist links behind wildlife crime. You know, so many people absolutely detest that wildlife crime occurs, I think most general humans do but being able to identify that must feel so rewarding, particularly as you said, you love the outdoors.

Elke Biechele 8:27
It is really rewarding. And it’s also nice to hear then that people are interested that what you found the terrorists, our investigation stopped at finding the ones who slaughter them and ship them. But we didn’t look into the purpose of it. And so then if it turns out it’s a terrorist case, rather than a wildlife crime, it gets much more attention, much more funding, and more can be done. So it’s an absolutely important angle to take that is traditionally missed because you assume that you don’t have access to bank accounts and you can’t find it, but you can.

Kelly-Ann McHugh 8:59
I’m interested to hearing more about that throughout the podcast. I think this next question is probably pretty self explanatory based on what you’ve already said, but what are the biggest risks that you’ve taken? And have they paid off?

Elke Biechele 9:13
I think they have paid off. Or it’s still to be I mean, it’s still to be seen. We’re a young startup, but in terms of rewarding experience and happiness, they have long paid off. And so the the biggest risk I think I took is to decide that I, I will leave the banking career for good. So now it’s going into the more unknown world of startups, but it’s my own destiny for me to shape for me to change it’s tremendously more rewarding and makes me happy every day. So I get out of bed voluntarily.

Kelly-Ann McHugh 9:44
We do like to hear that particularly in COVID times, which we all still are mostly, and particularly here in Singapore, still another month really to go and we can’t jump out of bed and go to an office. So jumping out of bed and getting exciting work is at least something.

Elke Biechele 10:02
And also it has given opportunities because the criminals, yes, they are also locked down. But so where where there’s corruption, you might find that some of the goods have been declared as illicit. Some competitors still sell them. So how is this possible? And so I’ve uncovered quite a few of the illicit people that are in these markets. And that’s quite interesting on how some of these countries that operate.

Kelly-Ann McHugh 10:25
Yeah, absolutely interesting. I mean, we’ve seen a lot of that and be detected already, haven’t we? A lot of health care goods in cases like that? So, obviously, you’ve probably learned a few different things along the way in moving from banking to starting your own startup FinTech regtech, here in Singapore. What have been some of the most important lessons you’ve learned along the way?

Elke Biechele 10:49
I think lesson number one is follow your dreams, no matter what people tell you stay secure and so on. Follow your dreams, I think is one of the most important lesson to learn because if you don’t follow your dreams, then life is short. And initially in following your dreams and leaving, doing what most people will never do, you get immediately discouraged by many who want to be, you know, helpful by being devil’s advocate and saying, you know, these are the risks, that is the risk, that won’t work, this won’t work. But then, you know, if you still do it, you, you will succeed because it’s your own, and you can make it work. So it’s a matter of pulling through and it’s your own baby and it’s much more rewarding. And now also, I learned that say, you can’t do it alone. And there’s just not enough hours in the day to run all of it. And as you go along, you find it super exciting. And you want to explore just another product angle, just another market segment. And you need people for this. And you also need the brightest and the smartest and first and foremost, the most flexible ones. So people who go with time who embrace new technologies is priceless. They’re fantastic. Also another lesson emotion and business doesn’t work sometimes. But the best results in many aspects come from quantifiable analysis. So most businesses have failed because the founder loves the product too much and doesn’t look at who is their customer first and get warned in many of the incubators and startup and stuff, make sure you, you ask your customer, what do you think of before you spend all this all this money building something that you find really, really cool. And I’m still emotional about Amalia. I think she’s fantastic. It’s it’s important to pick a role model. And for women leaders in financial services I think it’s pretty difficult. And we all probably have had some experience with our own kind, being not the supportive one. Now, I think it’s changing drastically and I’ve met so many wonderful women, and so many supportive women and it’s it’s been absolutely so superb so there’s many, many women leaders you can now take inspiration from. And also who don’t lead like with, with the worst example of what they have experienced, and then try and replicate it. But they lead with kindness with empathy, and create much more than what we would have probably all expected 10 or 20 years ago.

Kelly-Ann McHugh 13:20
It’s it’s an interesting point. And I think I mentioned this on the last podcast because I am from New Zealand, but I think a leader who has led through COVID in this time with a with empathy has been just Jacinda Ardern. So yeah, that’s, that’s been really inspiring to watch even seeing people who aren’t on the right side of that, you know, of her politics have been inspired by her, which is great. And so who has the view the role models you have been inspired by then?

Elke Biechele 13:47
Well, I think our chancellor, Angela Merkel, she started 16 years ago, or 15 years now. And she was I think she started at a time when it was still very much male dominated. And and so where the whole government was made up of like 80% men and 20% women being in family and environment, under-funded budgets. So she’s pushed all of this to to make tremendous progress in Germany and Germany when, at the time when I left, when I left there were 2% of women in leadership positions in Germany. And so now I think she she’s moved it up to some fantastic 25%. I thought she has a she has a fantastic way she leads with kindness with empathy. She’s well respected and she needs to do a good job for society for her people, which I think is really nice. And another leader is Lee Kuan Yew from Singapore, the Founding Father, I think what I admire with him most as well as that he’s also been in this to create something so to do a good job, rather than for many it’s the power aspect that is so enchanting, but I read his biography From Third World to First. And when I read through this, it’s pretty much the same as a startup. So what do you need to build? What do you need now? What departments do you need? What functions?

Kelly-Ann McHugh 15:11
Right? I’m actually literally writing this down right now.

Elke Biechele 15:15
When he was kicked out of Malaysia and then he had like the swampy land. Then he made something out of it the the vision, he ran it like like a startup and succeeded. So when we look around now, how Singapore looks like, I mean, phenomenal this is one of the few people who would ever be able to do it now.

Kelly-Ann McHugh 15:33
Fantastic.

Elke Biechele 15:34
So I think this teaches all of us a lesson to see whatever problems you have in mind must be daunting to be the only woman leader in a male cabinet and or be the master of a swampland. But it’s, it’s an opportunity if you make something out of it. So no matter how, how bad it looks, if you make something out, you can make something out of it. And it’s a puzzle to be solved. So a bit like sort of our current solution. Financial crime detection is like 0.01%. But if we put our heads together, we can increase it. And we can change it, we can stop deforestation. And we can stop all these human trafficking and so on all these crimes that are done for profit. So no matter how daunting something appears, there’s always a way to overcome.

Kelly-Ann McHugh 16:19
Absolutely. So and the next segment really goes into our expert opinion piece, and today we’re going to really deep dive into a bit more about Amalia and RisikoTek and your views on financial crime and solving this pain point. So why did you start RisikoTek?

Elke Biechele 16:39
Well, during my banking career, I noticed that the industry approach to financial crime compliance is completely inefficient, needlessly costly, and it didn’t solve any issues that it was trying to solve. So banks still get fines at the same rate as 10 years ago, financial crime risk doesn’t get properly assessed or detected. And there has been really little change despite all the money spent. But I dislike complaining about something without making an attempt at a solution. So therefore, I set out to create a financial crime detection and risk assessment solution that can use complex data analytics and AI to detect complex transnational criminal activity, such as financial crime, and help disrupt the root cause of many of the world’s worst issues, to help it make a better place. I also felt that there was so much I could do, but felt held back by the bureaucracy and the patriarchal culture of large financial institutions. Basically, if you have an idea, then you need to go on your own.

Kelly-Ann McHugh 17:39
Yeah, and it’s often a very long process, trying to be agile, but not really being agile. And so things just take a really long time. And so, you know, here you are, how many years has it been now since you started?

Elke Biechele 17:53
Since we started, we started, I founded the company on Valentine’s Day 2018. I don’t know what other people do!

Kelly-Ann McHugh 18:02
You find that your new love, Amalia! You were talking to me and earlier, tell me a little bit about the name Amalia, how did they come up?

Elke Biechele 18:11
So I’m Amalia. I mean, we wanted to do something about AML. So financial crime is AML, anti money laundering. And we had Indonesian developers for this. And Indonesian developers, they were really excited about the project that they’re going to embark on. And so they were searching for names and they had team fun. And then somebody says, oh, Amalia, my, my girlfriend is called Amalia, and it’s AML. Why don’t we call it Amalia? So then there when we saw the first draft of of this solution, then it said, Amalia, and we all fell in love with it. It’s a fantastic idea.

Kelly-Ann McHugh 18:44
Absolutely. No, it’s fantastic. I’m just this poor Kiwi girl from down south who struggles to say different names, but I won’t forget it now. No, Amalia. In fact, it sounds almost romantic which um…

Elke Biechele 19:00
You can fall in love with it. And when you start investigation you also get is like addictive like you would be to a love. You just want to know one more thing.

Kelly-Ann McHugh 19:09
Yeah, absolutely. And the solution is helping to detect that. So, you know, you’ve talked a little bit already in the podcast about why there’s been so little progress in making a dent in financial crime. Tell me a little bit more about that, in your experience.

Elke Biechele 19:27
I think over the last 10 years that I listened carefully, there have been thousands of conferences and I spent quite a bit of money to go to these conferences to speak at the conferences. There’s experts from banking, from government, from NGOs, their industry groups, so they are very good at highlighting the problem. We all know why there’s wildlife crime, we all know about deforestation, but then when it comes to the solution, so usually these conferences they don’t have technology providers to speak because you could have a solution. It highlights the problem. But to focus on the solution would be I think, more interesting, I can take it that creates awareness. But at the same time, we need to stop complaining about the problem and form ideas to solve it. It’s it’s important and we’re running out of time. So corrupt government officials still operate openly in many countries, and very few are convicted. And if they are, they get acquitted at appeals process. So it’s really, financial crime compliance at many banks is still largely full of manual processes inefficient silos, systems that detect almost nothing but cost millions. They have huge staff and numbers to analyze thousands of false positives. It’s estimated that over 2 trillion annually get laundered and it’s who knows what the estimate is if one person can be bigger than the GDP of his whole country that he manages. And so it it must be gigantic. So 300 millions in fines paid by banks and billions spent in compliance and and it just doesn’t change. The process is not not the right process that we all follow. And so with this, we need to, we need to do a few changes. We need Amalia.

Kelly-Ann McHugh 21:16
Absolutely. I think, you know, one of the things that you talked about when we had our prep call was around the fact that police officers and certain officials just actually don’t have the resources or the experience. They’ve been trained for one part of crime and financial crime is just so different. And yeah, I mean, how do you reach the other 99.9%, you know, of undetected crime?

Elke Biechele 21:46
Oh, that’s right. And and so we’re all looking at silos. And we also don’t share information because it’s confidential and as much as I love data protection, but it also helps the criminals a lot. And I’m not entirely sure why this why why the big push for GDPR to just name a few has been so successful. And so it’s been backed by by people. I don’t know if you would get such a large push for childcare or so how important is it probably would be a really hard task to put through. But data protection, everybody understands, and they do it. But yet for detection, it’s a it’s a nightmare. And so I think we are we are running all these silos and looking at narrow aspects. And we look at sanction screening, and we look at transaction monitoring. And all of these can take data sources of the only once, but then you don’t learn from the other one. And so it’s important to take all those data sources in one go analyze them against financial crime, key indicators, and get an explainable financial crime risk rating that can be dynamically and it’s updated as new information comes to light. So it needs to be an assessment and a qualified assessment much like credit risk has 21 or more categories, financial crime has 2, its high or low. It’s a yes or no. And I think we can do better.

Kelly-Ann McHugh 23:10
I think that’s really interesting, right? Like, comparing it to credit risk and or even market risk. You know, there’s just so much quantitative factors and or even qualatative that go into an assessment. And you’re right, it’s so much more granular than standard methods that we use right now.

Kimberley Cole 23:30
This episode is brought to you in partnership with MyComplianceOffice with clients in over 80 countries and employees around the world. MyComplianceOffice is committed to delivering affordable easy to use compliance technology. Thank you MyComplianceOffice for your support of Risky Women Radio.

Kelly-Ann McHugh 23:52
So talk to me a little bit more – Amalia? How can these challenges be solved? I just keep wanting to say that name now.

Elke Biechele 24:01
So Amalia was created specifically to address those kinds of issues. And so she, she uses our AI engine to analyze these massively big data sets, terabytes of data sets in one go. And then lets us know who is who appears suspicious and why they appear suspicious. And so the financial crime risk assessment detection can be improved by simultaneously looking at analyzing all data sources relevant to the detection of criminal activity, combined with logic and AI that understands all known criminal methods and typologies. So my solution can determine who’s connected to whom, in a criminal network and understand how they’re committing their criminal activities. In particular, with a light of a risk assessment, so many, many tools build networks, so yes, they’re connected, but how suspicious is it? Maybe it is suspicious. So if you compare that to market risk, where you lose basis points if the market moves against you and financial crime you just say suspicious you, you’re now just barred from banking. And it’s like 100 countries are excluded from financial, financial services for, have no access to the world’s financial services. It’s a pretty, pretty blunt tool in the fight, then you just drive the criminals underground. So it needs to be going away from the silos and needs to fit into one place. I don’t know on how many people are still remembering that we had Walkmans, video recorders, music players and many other things, CDs, and all of it when the iPhone came out, all of this was redundant. And we need to get into this from the financial crime perspective as well. We need to do better and put it all together. And this is what Amalia can do. So law enforcement can use the system to detect complex financial crime activity by linking the relevant data with criminal justice data together, for example, now, how cool is that somebody opens a new company, you continuously run it against the justice and you know, oh, this guy has been convicted, or he should be convicted. And now he’s opened up another company in this country. So you could be much better, much faster at detection, and much more versatile in your response.

Kelly-Ann McHugh 26:21
That’s, that’s interesting. I like the comment that, you know, Amalia is the smartphone for financial crime detection. And I think, you know, as the world in general, we’ve seen this in a risk compliance, financial sector perspective, is demanding more open data. And, you know, to really integrate with API’s in multiple different countries, we’re going to be able to see we need systems like this to be able to identify and pull that information together. So it sounds like that’s that’s what she’s doing.

Elke Biechele 26:54
I think, absolutely. And that is so essential to put it together to make sense of it. And this is what AI technology can really do.

Kelly-Ann McHugh 27:01
Yes. So So tell me a bit more about that. I’ve been passionate about AI for a while I used to work in a regulatory compliance space where AI is very much so needed and mapping obligations, etc. So, and then reading legal texts, which is challenging, so tell me a little bit how does AI tick, help you from a financial crime perspective?

Elke Biechele 27:23
Yeah, so through AI technology systems can be taught to think like a money launderer and we even have a training course titled Think Like a Money Launderer. And we teach places like Interpol or financial institutions to think like money laundering, and teach the currently known methods which many are known. They’re scattered all over the internet, but they’re not in one place. And they’re not, not sort of in bite sized chunks that you could immediately use to detect the time pressure. So we use them and using these to learn how these will change in response to new variables, new controls, for example, you put in new laws or methods of detection. So to give an example, if a customer submits the same invoice number multiple times in support of a trade finance letter and makes his trade always with the same counterparty, which relates to products that are unusual for the stated business. AI can then be used to detect the various combinations of suspicious indicators in this pattern. A bank will not need to rely on a small number of people that are highly experienced analyzing reviewing many pages of these trade documents to spot this. AI has the added benefit of removing the concentration risk of key people leaving the organization. So if you usually rely on people who are trained in something, but not everybody can be an expert in any sort of product that is out in this world so how on earth can you detect it so you need to we we create an algorithm that then takes away the need for the specialist knowledge and you can plug in an algorithm that says, Put this container containing computers with the with the invoice be understated / overstating, or is there a chance of ghost shipping and you don’t need the knowledge to know how you validate computers, and then Amalia will tell you. And also, like if you have a container that has a certain weight is from a Tea Company, but all of a sudden, it’s heavier, and it took 48 hours to be delivered to the port, which is only 1.5 kilometers away, then it should flag up to say, watch out for this container, there is something in it, you’ll find elephant tusks.

Kelly-Ann McHugh 29:25
Oh gosh, I’ve just got goosebumps thinking about that. I mean, it’s fantastic that you can utilize this tool for doing this. And I think, you know, absolutely more law enforcement, financial crime, you know, FIUs need to be utilizing this, I mean, it sounds fantastic. If you know, if, if there’s a country or a FIU that just knows that there’s lots of financial crime in this particular space, and you’ve got the algorithms and the knowledge to help detect it.

Elke Biechele 30:00
Would be so much more efficient than just paying fine after fine. I mean, how much can you pay into the system? And how much would you save in the fine alone, and then you wouldn’t make all the mistakes rejecting normal people because they exceeded the threshold of $10,000. Or they’ve moved addresses one too many times. And you reject this business, you pay these fines, but you wouldn’t invest into revamping your system infrastructure. So I think an intelligent system like ours, that puts it all into one place could really help help banks also grow again, make more business except more people again.

Kelly-Ann McHugh 30:35
Yeah, absolutely. Because of that risk assessment piece as well. Right?

Elke Biechele 30:39
Yeah, absolutely. So it will tell you that this person is like 40% risky, there’s something about them, but we think so in the absence of other things and positive other factors, we think it’s like 40%, then the risk officer can really go and say I accept 40%. But I wouldn’t accept 80%. So then it becomes becomes an intelligent way to set your own risk appetite.

Kelly-Ann McHugh 31:02
Absolutely. And choose the products that that person is going to be able to have from you.

Elke Biechele 31:08
Yeah, I think it would be very, very useful and would help everybody so that there’s only winners in this. Except the financial criminals, maybe, but they’ll find new methods. They’re also pretty smart so they retool anyway.

Kelly-Ann McHugh 31:24
They do, as you’re saying on those Netflix series. So how will financial crime compliance evolve in the future? What is your future vision for financial crime compliance?

Elke Biechele 31:37
I think first and foremost, so new data is being created at the exponential rate. So it’s the ability to ingest and analyze these new databases that are created everywhere is the crucial thing. And the better we get at ingesting new data, the better it will be for the detection. So financial crime I think will become easier to detect. In the future as we’re starting to be able to make use of all sorts of inputs, including image and video recognition, geolocation, social media, internet data, and many other data sources that could be analyzed simultaneously to detect suspicious activity. And both public and private sectors will also gain the ability to effectively predict criminal activity using predictive analytics and AI that can spot patterns that are likely the precursor of financial crime. So I think criminals will need to change and they will adapt to much more than previously in response to these new capabilities employed to detect them. They too will also be using AI and learn how to counter any detection measures and predict what law enforcement will likely try next. This will spark off a technology arms race, I’m pretty sure and no end until perhaps the technology takes over. Like the Rise of the Machines until Amalia gets really big or Amalis gets pregnant and gets more, more little Amalias.

Kelly-Ann McHugh 33:01
Little baby Amalias!

Elke Biechele 33:05
I also think laws and regulations are being improved. So we already see the typologies that regulators put out there much better than they were five years ago. And so they will be more specific, more gets detected, more gets documented more we can put into algorithms to identify those beneficial owners and penalties will perhaps increase for those who don’t act. I also think anti corruption platforms are starting to be the key to winning. And I think this in many countries, this will will provide a drastic change. I think as people are getting more aware of how how widespread financial crime is, the more they will get motivated. And if a platform can make it available, much like Facebook that gave people a chance to to talk about all social things. Now, Amalia may one day be able to allow people to research if this house that they’re going to buy, who owned it before? And how was this purchase before? Do they want to give this person their money or not?

Kelly-Ann McHugh 34:06
And that’s a very real problem, isn’t it? That’s, that’s literally, you know, down to your real life as opposed to pie in the sky things that you don’t think necessarily are next door and actually affecting you. It’s been awesome listening to this and just seeing women in tech, woman and FinTech woman and regtech, you know, trying to change the game here and utilizing AI to really detect financial crime a true problem of our time. Yes, absolutely fantastic. And as a another regtech lover, mine in the conflict of interest space, it’s great speaking to you on on, where you see this going and evolving over time.

Kimberley Cole 34:47
Connecting, celebrating and championing women in risk, regulation and compliance. Risky Women Radio takes an intimate look at the rants and revelations of the top women shaping the debate of the industry.

Kelly-Ann McHugh 35:03
So, your rants and revelations What is your revelation?

Elke Biechele 35:08
Major institutions such as large international banks and law enforcement are not as advanced, effective or capable than many of the public seem to believe. They continue to be fragmented and slow to adapt game changing technology, and slow to adapt organizational structures. Criminals, on the other hand, tend to move really fast. They’re two steps ahead, or more, or 100 steps ahead and make large amounts of money with low risk of detection. It’s a sport. So law enforcement and financial services need to be ahead of the fast moving and smart criminals, they need to be equipped with the best technology. Enabling sophisticated knowledge. We are AI. That is our answer.

Kelly-Ann McHugh 35:52
Ah, wow. There you go. You’ve heard it here first. Yeah, no, absolutely. I think we’ve heard with other regtechs as well, right and the start up and rise of different types of financial services businesses starting from a core proposition and then growing on new technology and with new conduct risk focus. You’re right. You know, these major institutions and large international banks that have historically been in place, find it difficult to move and to change in the way that they need to, to help prevent and detect financial crime. That’s a great revelation. And what about your rant?

Elke Biechele 36:30
Why do nice people often finish last!? I think organized crime gangs can launder the proceeds of narcotics, weapons, humans, wildlife, do deforestation and corruption and the like, keeps the majority of human humanity living complete poverty is possible no problem without much of the chance of being caught. Nice people who follow the rules on average, earn very little in comparison to those who cheat the system and take a shortcut.

Kelly-Ann McHugh 36:57
Yeah, that accountability right. Accountability and responsibility, mmm.

Elke Biechele 37:03
That’s right. And no, I don’t want to complain without the providing a solution. So my answer to this is create a very smart financial crime detection engine. And that provides a risk assessment and can use a complex data analytics to detect the transnational activity. When you go transnational, you’re invisible currently. So it’s fantastic way to launder money, do all sorts of crimes, because in the country, you’re in the crime was committed somewhere else. And the country you’re somewhere else, the crime was found somewhere else. So it’s nobody’s responsibility. So we should try and discover this. And I don’t think nice people need to finish last if we’re determined enough to to make that difference.

Kelly-Ann McHugh 37:50
Absolutely. Thank you very much. And I think all of those that awards that you received recently and all of this really just goes to show that you know, stepping out of your comfort zone and starting a new business like this. You’ve already mentioned multiple times how rewarding it is. I mean, we’ve we’ve heard it here and I’d say our listeners would agree. It’s fantastic to see that, you know, there’s people trying to turn this around and help those nice people so they don’t finish last, it’s fantastic.

Kimberley Cole 38:20
Risky Women is a vibrant network at the center of a global community in a rapidly growing, evolving and influential industry. Given the continued pace of change, our rapid fire round revisits the most pressing topics to share ideas and offer listeners new perspectives.

Kelly-Ann McHugh 38:38
Let’s go to the rapid fire round. What is one word to describe the world of governance risk and compliance?

Elke Biechele 38:45
Inefficient?

Kelly-Ann McHugh 38:46
Ouch. No comment! Cure for the cost of compliance and waves of regulatory change?

Elke Biechele 38:55
Data analytics, artificial intelligence, high tech technology. All in one place.

Kelly-Ann McHugh 39:00
Absolutely fantastic. Are you optimistic, pessimistic or neutral in your outlook for the year ahead?

Elke Biechele 39:07
I’m an optimist. A proven optimist. Technologies and feasible solutions for some of the world’s biggest issues are being developed and by by innovative, very driven people, it’s always going to be better.

Kelly-Ann McHugh 39:21
I think we’ve heard your optimism throughout the entire podcast today. So I don’t think that was a shock, a shock at all. How about a book you recommend that everyone reads?

Elke Biechele 39:31
My favorite book is, Trust Me, I’m a Banker. I think this book combines everything you need to know about financial services, and it puts together although I mean, there, there are many good players and companies I’ve met many wonderful people, lovely people. But I’ve also met a few not too lovely people. And this book combines the characters of all these few not so lovely people and combines it into one character and it’s entertaining. Hilariously entertaining, and it was released during the credit crisis. He has, since David Charters since released a few more. So if you want to giggle a little bit before falling asleep, this is the book to read.

Kelly-Ann McHugh 40:14
There we go. And we all we also had that other book recommendation earlier in the piece as well from Singapore’s founder so we’re going to be busy. Something to watch?

Elke Biechele 40:24
My favorites are around the money laundering things on Netflix. Narcos, it’s a Netflix crime drama. On the story of the drug kingpin Pablo Escobar and the other ones who followed and it’s a old school money laundering still relevant as drug dealers of Narcos have had little need to use to change because they’re not detected. So they still they still can operate a lot and if they are detected they cannot get convicted. And I also like Call Saul. Call Saul is is the predecessor from the Breaking Bad. And Saul is one who tried it the nice way. And he just couldn’t find traction. He was too, too innovative to you know too disruptive and didn’t fit the normal lawyer pattern and eventually ends up working for the, for the criminals because they accept him the way he is, and they can use his talents best. And so it’s the story of a of a really lovely lawyer turning into a lawyer for criminals.

Kelly-Ann McHugh 41:31
Excellent. And then your favorite podcast, or something to listen to?

Elke Biechele 41:36
Yeah, I mean, I’ve had a fantastic experience now being recorded. I think Risky Women podcast is excellent. And we need more of those. I’m looking forward to seeing the other podcasts as well or hearing rather.

Kelly-Ann McHugh 41:51
And I think you were mentioning earlier that you’re a bit of a fan of TED talks as well.

Elke Biechele 41:56
I’m a fan of TED talks and I listen in particular in like, the guidance kind of ones, how to for business coaching, so the how to sell how to market, how you select the right talents, how to run your business, and so on. These are very inspirational ones. And I’m really grateful for people who would take the time to talk at TED talk and make it available to all of us. This is something like we want to do for the algorithms is your here’s your advice, what to look for. And then it’s a real one.

Kelly-Ann McHugh 42:28
Absolutely, it’s all in the greater good of improving our hit rate from that 0.01% that we potentially think it is for financial crime. Let’s spread the word and help to detect it. Well, thank you very much. It’s been fantastic speaking to you. And we look forward to seeing how you go here in Singapore and and I look forward to meeting you post COVID and perhaps seeing a little bit more of how Amalia works.

Elke Biechele 42:53
Thank you so much. And thank you for interviewing me on this Risky Women podcast. It’s an excellent initiative. Very insightful.

Kimberley Cole 43:01
Thank you for listening to this exciting episode of Risky Women Radio to connect, champion and celebrate women in risk, regulation, and compliance. I’m Kimberley Cole, based in Hong Kong. For more information on the Risky Women global network, head to our website, in the Episode Notes and please be part of the ongoing conversation by subscribing to this podcast, connecting with us @RiskyWomen on Twitter or even reaching out to me directly by email.

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