5 Must-Know Highlights from Money 20/20 Las Vegas 2024
Las Vegas buzzed this week as thousands of thought leaders and financial experts convened for the Money 20/20 conference to discuss the trends and challenges in banking and financial services. This year, there was a clear focus on AI-backed innovation in compliance, fintech regulations and financial crime prevention.
The Castellum.AI team enjoyed three productive days at the conference, sharing insights and building connections with industry peers. Here are the five biggest takeaways from Money 20/20, 2024.
Key takeaways from Money 20/20 Las Vegas
1. Integrating AI in compliance requires human oversight
One of the most talked-about topics this year was the role of AI in compliance—with a clear consensus that while AI can automate repetitive processes, human oversight remains essential. AI use cases should fit within the framework of explainable AI, especially since regulators demand transparency and are wary of ‘black-box’ solutions.
Fintechs and banks emphasized the efficiency of automating the screening process with AI-driven solutions. For example, one major fintech noted that less than 1% of Level 1 alerts require Level 2 escalations, highlighting the notion that using AI for tasks like Level 1 alert decisioning can significantly reduce human review workloads.
AI can also assist in policy review by flagging discrepancies between internal policies and regulatory changes.
However, conference-goers emphasized, AI should augment, not replace, human judgment in compliance processes.
2. Outdated, off-the-shelf compliance solutions to be upgraded
A significant theme at Money 20/20 was the pressing need for innovation in compliance technology and upgrading legacy tech stacks to meet the evolving nature of financial crimes, from new fraud pathways to the speed of instant payments and the impact on sanctions compliance in transaction screening. However, industry leaders pointed out that it’s easier said than done.
For large banks, it's a lengthy process—with major changes to tech stacks taking significant investment in change management—to integrate new vendors and update their compliance processes.
On the other hand, fintechs frequently approach compliance in an ad hoc basis to meet immediate needs. But having a proactive, strategic approach to compliance from the outset is crucial for avoiding violations in the future and reducing the cost of future remediation. For example, Themis CEO highlighted instances where many fintech firms initially use off-the-shelf tools, such as no-code product management software like Monday.com, for compliance alert clearing.
There was a strong emphasis on the need to educate fintechs about implementing a robust compliance stack from the beginning. Delaying this can lead to complexities as they scale, acquire more customers and partner with sponsor banks.
3. 24/7 compliance testing and real-time monitoring
Money 20/20 discussions reflected a clear consensus that continuous compliance testing and real-time monitoring are no longer optional. Both fintechs and their sponsor banks should deploy 24/7 testing to verify compliance processes and tech stacks are reliable. This means ensuring that transaction monitoring, screening, customer risk ratings and AI alert adjudications align with policy requirements.
Conversations also covered reimagining the traditional three lines of defense—business units, compliance teams and audit functions—to include continuous oversight that can help institutions stay compliant and mitigate risks effectively.
4. Compliance narrative shift: From cost center to ROI driver
Another important discussion centered on the evolving perception of compliance. Traditionally seen as a cost center, there's a growing recognition of its ROI potential. Organizations now understand that effective compliance can ensure smooth operations, faster payments and improved user experience.
Even fintechs are waking up to the fact that a strong compliance program is essential for securing top-tier bank partnerships, achieving long-term growth and avoiding hefty fines and regulatory issues.
5. Next-gen fraud prevention for emerging payment methods
A major takeaway from this year’s Money 20/20 was the urgent need for advanced fraud prevention strategies to keep up with new payment methods. Panelists emphasized that the rise of synthetic identities requires institutions to look beyond transactions and thoroughly scrutinize identities and accounts. Moreover, fraudsters are fast to adopt AI technologies, often outpacing banks and fintechs.
Fintech specialists urged financial firms to take proactive measures and implement advanced detection methods to tackle the fraud and compliance challenges associated with each payment type.
What’s next?
Money 20/20 underscored the evolving landscape of compliance in the financial sector—the importance of integrating advanced technologies while maintaining robust human oversight. The discussions paved a clear path forward: financial institutions must prioritize investing in strong compliance programs, continuous monitoring and smart solutions to improve operations, mitigate risks and meet regulatory standards.
Needless to say, when it comes to financial compliance, staying ahead of the curve is essential. Experience the power of explainable AI in compliance with Castellum.AI. Our platform guarantees fewer false positives and offers real-time monitoring to enhance the compliance efforts for banks and fintechs.
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