Nordic banks are getting ready for the future with robots replacing humans

Company News

The two biggest Nordic banks have both recently beefed up their compliance units significantly. Both say the extra headcount is temporary.
Nordea Bank Abp has hundreds of employees who scrutinize billions of transactions in order to catch anything that looks potentially criminal. It’s a costly, inefficient system that Mikael Bjertrup, head of the bank’s financial crime prevention unit, plans to change. Bjertrup says that about 20 per cent of suspicious alerts are currently closed by algorithms, based on machine learning, with the rest still being handled by humans. He wants to see those numbers reversed so that algorithms handle 80 per cent.
“We’ll be fewer people in the future, but our defense will be better,” he said. “We won’t need as many as 1,500 employees in the future, as technology improves.”
The head of compliance at Danske Bank A/S, Philippe Vollot, also says headcount will probably be scaled back once “technology kicks in.”
Insatiable Demand
Compliance has emerged as an area of banking in which the demand for more headcount has so far seemed almost insatiable. The hiring binge at Nordea started in 2015 after it was fined for failing to live up to anti-money laundering requirements. More recently, laundering scandals that engulfed Danske and Swedbank AB have added to pressure on the industry to allocate much bigger resources to fighting financial crime.

 With labor accounting for roughly three-quarters of the cost of complying with anti-money laundering requirements, Nordic banks are figuring out how to replace people with artificial intelligence, algorithms and automated customer screening. They say a key frustration now is that the authorities are struggling to keep up, after banks plowed huge amounts of money into their risk controls.