Despite years of hype around AI, it has taken until recently for financial crime compliance (FCC) teams to meaningfully replace traditional outsourcing with intelligent automation.
According to Workfusion, nine of the top 20 U.S. banks are now using its AI Agents to power end-to-end FCC processes, while institutions in Europe and the Middle East are also adopting the technology. This shift has transformed a long-standing industry challenge—false positive alerts—from a persistent headache into an increasingly irrelevant issue.
For years, compliance leaders resisted being the first to fully embrace AI in FCC operations. Even as machine learning gained traction in smaller tasks, there was hesitation around giving AI full ownership of complex workflows. Many firms preferred to rely on temp workers and third-party service providers to handle resource gaps, trusting in legacy approaches over automation. This risk aversion was understandable but ultimately prolonged inefficiencies.
The outsourcing model, while popular, has consistently failed to deliver its promised value. Despite persistent promotion by major service providers, clients often experience inconsistent service, poor risk ownership, and inflexible contracts. Overseas staffing brought additional challenges such as communication gaps, cultural differences, and high turnover. A Celent study revealed that 77% of banks still use outsourcing in FCC, yet two-thirds of them only saw minor improvements in workload capacity—typically between 5% and 25%.
Why did this ineffective model persist for so long? The answer lies in the influence of service providers themselves. Through relentless advertising and white papers, they shaped industry narratives and cast doubt on in-house alternatives. Their message often redirected blame toward the client, suggesting that outsourcing failures were due to internal readiness—not the service itself. This fear, uncertainty and doubt (FUD) made it harder for compliance leaders to consider change.
Even the European Central Bank has raised red flags. In a 2024 supervisory update, the ECB warned about growing overdependence on external providers, citing risk assessments and audits being overlooked in a significant number of contracts. The lack of visibility and control exposed banks to regulatory risk, prompting stronger scrutiny from supervisors.
Yet, it’s not only outsourcing that contributed to the delay. Until recently, there was no truly complete technology alternative. Before WorkFusion introduced its AI Agents in 2022, compliance teams had to patch together various tools—RPA, ML, IDP—to simulate an automated process. But these lacked essential features like exception handling, human oversight, and integrated audit trails. The result was an incomplete, unreliable system that failed to gain internal buy-in.
That has changed. WorkFusion’s AI Agents, such as Evelyn, can now manage entire workflows like Names Sanctions and PEP Alert Reviews. Evelyn alone can automate 60-80% of alert review work, automatically resolving the majority of false positives and reducing the need for manual effort. These capabilities go beyond what outsourcers can offer, providing better performance without the overhead of ongoing communication, training, or vendor management.
By adopting AI Agents, leading banks and FinTechs are moving away from inconsistent third-party support and reclaiming control. They’re reducing risk, improving scale, and gaining a more auditable, cost-effective solution. In a sector where precision, speed and accountability are critical, the shift towards AI is proving not just necessary—but inevitable.
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