4th AMLD Directive Just took effect, page-7

And this ...

"Innovations in financial technology (FinTech) are rapidly changing the global banking system, not only from the consumer perspective but also in ways that are hidden from view. While FinTech startups and existing technology firms work to improve how consumers interact with the financial system, banks themselves are pouring billions of dollars into developing faster and more efficient methods for meeting their regulatory compliance obligations. In a post-crisis environment which has seen significant new regulations and restrictions placed on activities and operations, as well as record-breaking enforcement penalty amounts, reducing the cost of regulatory compliance is an attractive means of increasing margins.
Regulation technology (RegTech) is the branch of FinTech that focuses on improving financial services providers' compliance and internal control systems. Among other things, RegTech applications automate risk management processes, facilitate regulatory reporting, prevent fraud, enable companies to stay abreast of regulatory changes around the world and support strategic planning. ...

.. Moreover, the potential risks for an institution in the AML and sanctions context are magnified given the potential civil and criminal consequences for noncompliance, not to mention the public safety issues arising from the criminality of the conduct sought to be deterred. Thus, the accuracy, transparency, functionality and continuing reliability of an AI system is imperative.
So far, regulators are taking reactive stances and proceeding with caution in evaluating and adopting new methods, particularly when it comes to AML regulations. The bedrock of AML is the 'know your customer' (KYC) regime, requiring institutions to verify the identity of customers, clients and business partners, including their beneficial owners if they are legal persons. KYC, to a large degree, depends on customers telling a bank that they themselves are a high risk. Even though an AI-based system would be more effective at preventing actual money laundering and terrorist financing, banks must still use a traditional KYC approach because the regulations focus on the process, not the results."