Enhanced AML Compliance and Predictive Risk Management: Generative AI Empowering Synthetic Blockchain Transaction Data and Financial Crisis Scenarios

Abstract

The importance of adhering to AML (Anti Money Laundering) regulations in the FinTech sector is constantly evolving, and shifting towards risk management. Our study delves into utilizing AI technology to generate blockchain transaction data and simulate financial crisis scenarios for improved AML compliance and risk management strategies. We leveraged cutting-edge generative models to create transaction datasets that mirror real-world blockchain data. Additionally, we implemented AI-powered simulations of crises to stress test. Refine predictive models. Our findings indicate that Generative AI can significantly enhance AML frameworks by providing quality synthetic data for training and validation purposes. It also serves as a tool for assessing the resilience of systems, identifying vulnerabilities and offering valuable insights into potential risks. This research showcases the potential of using AI to fortify institutions against money laundering activities and bolster their ability to foresee and address risks, in today's intricate financial environment.