NAB finds legal limits for GenAI in fight against financial crime

NAB’s ambitions to use generative AI as a tool in the fight against financial crime are being curtailed by rules that prevent it feeding data to technology vendors, both local and offshore.

The bank has criticised as “outdated” the tipping off provisions of Australia’s anti money laundering and counter-terrorism financing (AML/CTF) laws.

These require banks to report “suspicious matters” to the Australian Transaction Reports and Analysis Centre (AUSTRAC) but make it a criminal offence to disclose a report has been made, or any of its contents.

NAB said in a parliamentary submission [pdf] published over the weekend that rules should be revisited to allow “private-to-private information sharing”.

It outlined a number of reasons for this, including to “ensure [suspicious] customer behaviour is being assessed and investigated across the industry, rather than in a siloed manner.”

Of note is that the bank wants to see if generative AI can help to reduce risks associated with financial crime, but this is difficult when access to the underlying data is as restricted as it is.

“Limitations on information sharing between private institutions may also have a negative impact on innovation in the financial sector,” NAB said.

“Generative AI creates the opportunity for financial institutions to analyse large volumes of information to identify and better understand financial crime risks and implement effective risk management controls as a result. 

“Financial institutions will generally need support from third parties (both on and offshore) to develop and deploy these technology solutions. 

“However, these third parties are limited in the support they can provide to develop, test and deploy new intelligence, detection and other capabilities due to tipping off provisions which NAB considers ‘outdated’.”