Technologies, (Dis)-intermediation and Financial Transaction Monitoring – MonFinTech

The project MonFinTech aims at understanding how Artificial Intelligence (AI) and the blockchain technology will transform financial transaction monitoring. Firms and consumers can use financial systems to process illegal transactions: tax evasion, purchasing of illegal products or services, and money laundering. The possibility to record and process financial transactions via decentralized ledgers and to use AI and big data analysis to detect illegal transactions raises several issues that we will investigate in this interdisciplinary research project. With a team composed of a majority of economists, associated with computer scientists, lawyers and mathematicians, we would like to understand whether these new technologies could: 1) improve the efficiency of the financial intermediaries’ monitoring activities, 2) decrease the volume of illegal transactions, 3) change the intermediaries’ incentives to comply with the regulatory framework, 4) impact the market structure, 5) raise new challenges such as biases and detection problems that may not be well understood yet either by firms and regulators. The project will deliver both theoretical and empirical research papers, and enable rich interactions and knowledge sharing with the regulatory authorities, which are highly concerned by the impact of technologies on the illegal use of financial systems. In addition, we will share the results of our research with master students, who will be confronted in their career with new compliance issues given the state of technologies.