Banking Circle CIO: ‘AI can spot red flags that humans never could’

13 May 2022

Michel André, Banking Circle. Image: Ian Harding/Crispy Dog Productions

Banking Circle’s CIO, Michel André, says fintechs need to use AI and machine learning to address security challenges in the payments sector.

Michel André is the CIO of Banking Circle, a finance and payment institution with offices in Denmark, Germany, Luxembourg and London.

André is a senior technology leader and manager within financial services, with a 20-year background as an architect and technical leader in the financial services industry. He has worked with internet trading platforms, exchange technology, real-time risk management and information distribution.

André told that his role as CIO has evolved beyond maintaining regular IT software. Now, he must ensure the company is keeping pace with evolving customer demands, which can often mean looking for support from third-party experts.

“Comparatively, as a tech-first payments bank, Banking Circle is uniquely positioned when it comes to developing technological solutions in-house. This is because progressing the banking and technological innovation are both important components influencing our engineering strategy and market offering,” he said.

“As CIO, my responsibilities lie in leading the development of solutions and platforms that uniquely marry the banking-tech product with wider business initiatives.”

‘Traditional rule-based approaches used in transaction monitoring are incredibly poor’

Are you spearheading any major product or IT initiatives you can tell us about?

Though there has been an exciting change in digital transformation momentum within the industry, the transferral of money between countries remains a slow and expensive process with transactions taking up to five days.

Cross-border payments are at the core of Banking Circle’s offering and we are always working towards making payments as fast and cost effective as we can for our clients.

Undergoing the shift to the cloud and establishing our foundation there has strongly positioned us for developing our tools and access to local payments on a global scale.

In turn, this is propelling our geographical expansion and mission for 2022 as we aim to broaden our reach and increase real time payments whilst scaling Banking Circle to the next level.

How big is your team?

Prior to joining Banking Circle three years ago, there were 15 people in our team. We have been in a lucky position to be able to expand over the course of the pandemic, last year doubling the size of our team.

Within the engineering team, there are around 100 people. Within the combined product and engineering team there are approximately 140 people.

What are your thoughts on digital transformation within the finance industry?

It is both an exciting and pressurising time for banks and payments businesses. They are servicing the global e-commerce sphere and having to evolve quickly to meet the demands of increasingly savvy consumers, who expect a seamless experience with instant access service options.

This trend is only going to accelerate. Therefore, it is critical for those working within payments to undergo digital transformations, adopting tools that will empower teams and appeal to customers, or else risk being left by the wayside.

This is where Banking Circle closes the gap between evolving payments trends and incumbent banks that rely on outdated legacy systems. Banking Circle’s platform was built in the cloud from the outset, so we could focus purely on developing a technology platform that could meet and exceed our clients’ expectations.

The cloud strengthens our agility when it comes to delivering cross-border payments, enhancing both functionality and an intuitive user experience, decreasing the cost and time associated with sending money across the globe.

What big tech trends do you believe are changing the world?

It’s been an exciting start to the year for fintech. In the UK, investment in the industry rose seven-fold last year compared to 2020, fuelling all sorts of new trends on the horizon.

Though there is a lot of noise surrounding the metaverse and augmented reality, I wouldn’t go as far as to say this will play a fundamental role in shaping the financial services industry specifically. Instead, AI and machine learning have the power to disrupt and define the industry going forward.

Utilising AI and machine learning will influence an array of factors, from how we onboard clients to enhancing transaction monitoring. Though the fintech industry received record high investment levels last year, simultaneously 2021 was the year anti-money laundering fines rocketed.

With this in mind, I urge governments and regulators alike to prioritise digital transformations and adopt AI and machine learning to prevent fraudulent activity slipping through the cracks. These technologies will pave the way for disrupting the security landscape for good in the fight against financial crime.

How can we address the security challenges currently facing the fintech industry?

As technology evolves, as do criminal tactics when it comes to fraudulent transactions. Traditional rule-based approaches used in transaction monitoring are incredibly poor because they use behavioural rules to detect crime, capturing and operating on limited parts of the transaction information.

As a result of this, the industry sees false positive rates at a crippling 97pc-99pc. Such erroneous mishaps can grievously harm customer relations and client experience. So, given the current landscape, it comes as no surprise clients are expecting a high level of security measures, as older processes and approaches do not cut the mustard.

To address such challenges, fintechs and payments businesses must build technologies with security at the core, which is why, at Banking Circle – as part of our mission to prevent financial crime – we developed our own AI and machine learning tools.

What’s exciting about AI and machine learning is they can spot red flags which we as humans never could, greatly reducing the margin of error. With these tools, Banking Circle’s platform ensures vigilant security measures and insights when it comes to transaction monitoring.

Vigilance and investment is also needed to elevate your broader security posture to mitigate cyberthreats. This needs to be done using modern approaches such as zero trust, multifactor authentication, zero-standing access and AI/machine learning approaches to monitoring and detection of potential breaches.

This level of in-depth security, combined with a human element of security awareness, is key to meet the new security landscape.

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