Leveraging emerging technologies to enhance anti-money laundering compliance in the Maltese insurance sector

Abstract

This thesis shall explore the potential of leveraging emerging technologies within the Maltese insurance sector as a strategy to enhance the effectiveness of anti-money laundering compliance, whilst supporting the sector's continued integrity in a rapidly evolving regulatory environment. It would examine how technologies such as artificial intelligence and machine learning, regulatory technology, blockchain and distributed ledger technology, amongst others, can transform the AML function via automation, behavioural analysis, and integrated risk-based monitoring across the policy lifecycle. Details to be explored include the ways in which emerging technologies may be integrated into this crucial sector, such as digital identity verification, automated screening platforms and lifecycle-aware monitoring systems, for instance. It shall also explore how Maltese insurance undertakings may use these technologies to address the distinctive money laundering risks of the sector, particularly at onboarding, ongoing monitoring, and policy surrender, and to provide a more efficient, proportionate, and risk-focused compliance experience. This research will consider the impact that technological innovations can have upon the effectiveness of AML controls, and how that contributes to the strengthening of the insurance sector’s contribution to the fight against financial crime. Furthermore, this research will also consider the potential benefits that the adoption of these technologies can bring to insurance undertakings in Malta, as well as any challenges that may arise in relation to the adoption of these technologies. Such factors to consider may include the cost of implementing such technologies, the availability of staff with the appropriate technical talent, regulatory complexities and explainability, amongst others. Through a consideration of each of these factors, it becomes possible to derive an understanding of the way in which the technologies can be effectively implemented into the insurance sector in Malta.