EMERGING TECHNOLOGIES | BDO LLP
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39 EMERGING TECHNOLOGIES | BDO LLP
CASE STUDY: RAINBIRD.AI Rainbird is an intelligent automation platform that can automate human business decisions. It enables businesses to visually model the thought processes of their experts, so as to enable expert-like decision- making at speed and scale. ‘It starts with a human expert building a model of the area you want to focus on,’ says CEO James Duez. ‘So with credit card fraud, you’d have a fraud expert build a model that contains every individual bit of logic that they've seen in their career around fraud. Rainbird then turns these human inputs into a multi-dimensional knowledge map that can make informed decisions at massive scale, sometimes millions of transactions an hour, informed by that seasoned human expertise.’
Other uses include fraud and serious crime, and credit decisioning and lending. ‘Large numbers of organisations and individuals need to borrow now. You’ve got a series of banking institutions that are used to underwriting lending using very traditional models that really haven't changed. There's a role to play for technology to be able to be able to evaluate at speed and scale, not just an applicant’s financial circumstances, but all of those softer touchy-feely considerations and factors that need to inform a lending decision in the current climate.’ One of the benefits of IA platforms like Rainbird is that it uses a very intuitive interface that a non-technical person can use to map their world, so that the decision-making process becomes ‘a business task, not an IT task. That’s where the true value of all these emerging technologies lies, where processes shift from being a technical software
There are many use cases for such technology in RegTech right now. ‘Regulations such as KYC and AML have put a huge burden on FS companies,’ says James Duez. ‘They don’t just have to meet the criteria, they have to continuously monitor, and evidence that too. Version six of the AML directive is not far away, and firms will have to manage that with potentially fewer people, more geographically dispersed, and a regulator breathing down their neck. The pressure’s only going to go one way. Building out intelligent automation tools can take on a lot of that very nuanced decision-making in a world of imperfect data that needs to happen to ensure that you meet your obligations. Bear in mind, too, that AML and KYC don’t just affect FS, this is every organisation now – from asset managers all the way to car dealerships.’
engineering task, with all that cost and complexity, into being something that can be done by the business. It’s devolved to the people that actually have the information and need the results.’ Another important factor for RegTech is that IA decision-making is probabilistic rather than statistical. ‘If you're going to use tech to decide whether somebody can borrow money or make a call about fraud, you need to be able to explain that decision,’ says Duez. ‘One of the big troubles in AI, especially with machine learning, is that it makes statistical judgements. So if you use a machine- learned algorithm to decide whether somebody should pay tax, it could look right and be wrong, or it could be wrong and look right. And you won't know the difference because the machine can't explain itself. With IA, Rainbird follows a chain of reasoning when it makes a decision which it can then explain and document.’
THERE ARE MANY USE CASES FOR SUCH TECHNOLOGY IN REGTECH RIGHT NOW. REGULATIONS SUCH AS KYC AND AML HAVE PUT A HUGE BURDEN ON FS COMPANIES... JAMES DUEZ CEO OF RAINBIRD
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