Compliance Careers in the Age of AI

James Booth Very warm welcome, everybody, and welcome to the next episode of Silent Eight Talks. My name is James Booth. I'm global head of AML, counterterrorism, sanctions, here at Silent Eight, and I'm thrilled to be leading this next episode of the new podcast series, so please don't forget to like and subscribe and share on LinkedIn. For those of you that are joining us again, welcome back. For those of you that are joining us for the first time, it's a new podcast, so we're shaping it, so we're open to feedback, we're open to discussion, and of course, we welcome guests as well to this podcast series. The whole purpose is to unravel the latest trends in financial crime prevention, money laundering, terrorist financing, sanctions, and of course, the role of AI in compliance, but we want to make it a little bit lighthearted. So while we have a very sort of serious undertone, I hope that the guests that we have on this series, whether you're seasoned an AML professional or you're new to the industry, that you take something away about us and learn and sort of focus and develop those skills. Now, I think today's episode is going to be one that we can all relate to, and that's because I've got the privilege of talking to an individual who isn't just sort of my personal career motivator and my personal mentor. But again... An individual who I'm also proud to call a friend as well, and I'm absolutely thrilled and honoured to be joined by Tim Tyler, who's the vice president at the International Compliance Association, and somebody who I have a deep, profound respect for, but crucially, somebody who's been at the heart of compliance education and professional development for many years. And I know a lot of my LinkedIn network and Tim's will have seen us double teaming up at various events around the world and online, and maybe join some of Tim's workshops as well. But Tim, thank you.

Tim Tyler For joining us, James. It's an absolute pleasure. Thank you for the invitation. Wonderful.

James Booth Now we had some conversations and a little bit of debate, albeit not too much because we like to do these things on the fly, really to consider what do we feel would be of the most benefit. Now I've got the insight of knowing a lot about Tim's background, but many of you won't. It's highly respectable. There'll be some things we can't talk about for various reasons, but maybe if you see Tim and offer him a refreshment, you may be privy to some of those stories. But I think it's almost perfect that we talk about careers in compliance, certainly an area that Tim and I worked in over the last number of years, hopefully influencing positively many of your careers around the world in your various sectors and different jurisdictions. But we are at the crossroads because I think more so we're talking about the impact of AI on the way that we work. So again, I reiterate, whether you're starting out or you've been in compliance for decades, I'm very confident that I think you'll find Tim's insight both quite practical and thought-provoking. So let's get into the conversation, Tim. I want to start off by your career because I said I've had the privilege of listening to your distinguished career to understand how you landed to be the vice president of the International Compliance Association. But would you be kind enough to share some of that with the audience today? So how did you get into this world of financial crime?

Tim Tyler Well, I'm not sure I would use the word distinguished, but I'll nonetheless give you a quick overview, James, and thank you for the question. But in doing this, I recognise it's useful, of course, to learn from other people and their careers. But I think what we're seeing now is that it's very difficult to plan a career, perhaps more difficult than when I started 40 years ago, or even where you set out about 15 years ago or so, James. And perhaps that's one of the things that we're going to come on to talk about. But briefly, my experience started in the police, City of London police, where I worked on the beat in the City of London for several years before moving into the CID and from there into economic crime. Of course, the City of London, as you'd expect, has a very large and thriving fraud squad. And I was part of that for several years before moving north to another county, to Cheshire, replicating very much the same journey through Uniform, through CID, and into fraud and wider economic crime. And along the way, I moved through the ranks and in time was leading the economic crime function for Cheshire. And from there, I moved into the National Crime Agency, or what became the National Crime Agency several years later. And I stayed with that focus on financial crime. I think it's a feature, isn't it, that many of us that have worked in countering financial crime, whether that's in the context of law enforcement or in a regulatory function or within private sector, within compliance and the like, we can very often find ourselves drawn into it, becoming quite passionate and engaged. And that was certainly my experience. So I led an anti-money laundering and asset recovery capability within what's now the National Crime Agency. I had offices working across strategic locations in the world and all across the UK. And we worked together with a key focus on organised crime in the context of, as I say, money laundering and asset recovery. It was a challenging time, but also a very rewarding time. And certainly something that I look back on with, well, with a smile as much as anything else. I moved on then to finish. My law enforcement career in heading up the UK International Crime Bureau, which is that part of the National Crime Agency that dealt with high volume international inquiries of a criminal or a fugitive nature coming in to or leaving the UK. So that was my law enforcement career, 30 years in total. And from there, I moved into the UK or the GB Gambling Commission, the gambling regulator. Regulating any organisation across the world that provides a gambling service to anyone within the United Kingdom. My role was as the head of anti-money laundering. And that was a fascinating time. It gave me a very different perspective on financial crime and, of course, money laundering and terrorist financing in particular. From there, I moved into the International Crime, International Crime, International Compliance Association and the ICA. And early on, I worked as a trainer, and that's where we first met. I recall that early, that first meeting with you, I think, was that? London, Canary Wharf, I believe.

James Booth No, it was in Cyprus, wasn't it? No, no, I think we, I remember this quite vividly. So it was almost an unusual coincidence that I think you'd had a team historically deployed in the UAE, hadn't you, Tim? And I was, I think a few years after this, I was an investigator out in the UAE, of course. So that was the first unknown coincidence. But from memory, I was attending a train-the-trainer workshop in London. Ah, that's right. And I was being accredited to train, and I believe you were in attendance for that.

Tim Tyler That's right. You were working for a national bank, an international bank at the time, weren't you, one of the biggest global banks. And so, yes, you were right. But, of course, you were working away from the ICA, and it doesn't stick in my memory as much as our meeting, and I'm thinking it was Cyprus where we met in the park. It was Cyprus, yes. When you'd taken up the role working within the ICA and we met for a drink and we talked about what you could expect and the practicalities of working in the ICA, I remember you were very excited.

James Booth And I attended your workshop and wondered what on earth I'd got myself into.

Tim Tyler I mean, the rest is history, as I say, but I remember going back to the same bar.

James Booth I know where this is going.

Tim Tyler We went back to the same bar, what was it, two years later? Maybe 18 months later. We both happened to be, or one of us, I can't remember the detail, but we went to the same bar in Cyprus, and it was the same lady behind the bar who looked at you. Oh, it was just you. It was just you, so perhaps you should tell the story, James. But the bartender looked at you and said, oh, you're back. Is your father with you this time?

James Booth Yeah, that was the Korean Palace, I believe, Tim, but I can't remember the city. Was it Limassol or Larnaca? I get the two mixed up.

Tim Tyler In Cyprus. It was. I'm not sure I've quite forgiven you for that. I'm still pondering on it. Nobody knows what we look like, Tim.

James Booth And based on that comment, yes, the lady that worked at the Korean Palace in Cyprus, I will forever remember asking if I'd have brought my father again. Obviously, I didn't inherit your height, Tim. No, you didn't.

Tim Tyler No. But let's move on. Let's move on, James. I hope that gives you some sort of insight to my career. It does.

James Booth And actually, I'm going to do this quite regularly. I'm going to pause and reflect on a few things. I mean, how many workshops have we led, Tim, over the years? But one of the big things that I've always spoken about is how we diversify our understanding on the fight against anti-money laundering and the control environment. And I think one of the biggest things I would say now, and we're going to move through skills and professional development quite soon, you can become very siloed in one particular organization and one particular sector, quite groomed as to what a... And I'm doing inverted commas with my hands here, but what a red flag might be or a control environment. And something I always encourage people, that's two things, and I'm going to say a third because I think we always do that, don't we? International experience, learn the thought processes of different cultures and the different risks. Cash may be predominant in one jurisdiction and not another one. The second thing I would always encourage people is go across sectors. You really develop a true understanding, I'm sure, Tim, in your international fight with law enforcement. That was really important and allowed you to transition into the gambling sector.

Tim Tyler It was, and that was one of the reasons I was appointed to that particular role. And it wasn't just a grounding, but it gave me the kind of insight that helped me to make some difficult decisions when required. And that, I think, has continued within the ICA. Of course.

James Booth And then your career sort of evolved into the education sector sector, didn't it? And we say education, and that has quite an academic twang to it, doesn't it? And of course, there was lots of academic rigour around what we did. But was that by chance, Tim, or did you really believe that sharing that knowledge and that insight and developing those competencies was something that you were, well, you were certainly passionate when I worked with you in. But did you foresee it going the way that it did?

Tim Tyler I didn't know what to expect, candidly. But one thing that does stand out, and I have talked about this before, I can't remember whether I've shared that with yourself, James. But I remember when I worked in the context of the fights against international organised crime, and I can reflect on working with some great people. And we saw some amazing successes and eye-catching success where we were putting away, disrupting organised crime networks that had laundered, literally audited 2.3, on one occasion, 2.3 billion. US dollars, on other occasions, many hundreds of millions of pounds. So we saw real success, meaningful success. And as I say, I was able to achieve that because of the amazing people that I was working with. But at the time, I can remember reflecting that because we had really good intelligence, we could see the impact of what we were doing. And yes, we dismantled organised crime networks. But again, that same intelligence. It's told us that within days, within hours sometimes, the money laundering market was able to reassert itself. So it didn't meaningfully disrupt the organised crime that underpinned it. In other words, the specialist money launderers that offered this, money laundering as a service, were able to simply fill the gap that was left behind by our arresting a group of individuals for... the laundering that I described. So it left you with a feeling of, well, of course we're doing the right thing. It's fantastic to have this level of success, and it was very much an international effort. But you wonder, well, is it really having a big, major impact? And it was that that took me into a regulatory space, and from there into the sort of education or the training space that we've now experienced together. Wonderful.

James Booth I mean, many people that are probably listening to this, Tim, may not have had the privilege to see the outcome of that. And I know we'll have lots of heads of and lots of analysts and investigators around the world. But I'll reiterate at this point, you know, we're privileged to be joined by a guest that has essentially put people in prison for this. So I don't want people to be disheartened that there's lots of statistics out there that we're not going to get time to talk about today. But maybe we will. We're hoping to convene again for a webinar soon. But it does make a huge difference. And actually, as we evolve, our conversation to start to consider the skills and the professional development and the changing landscape and AI, how you're going to play the role that helps individuals like Tim or other law enforcement professionals globally to combat financial crime. Now, since you've sort of moved into that education sector, Tim, my observation is that compliance financial crime AML has shifted so substantially over the last 10 to 15 years. And in fact, many people arguably since there was a rather large enforcement in 2012 probably didn't take financial crime seriously. And I described it like this, and I've spoken at various money laundering reporting officer events. Imagine a family table and all the heads of the family are sat around and you've got a guest that you've forgotten to invite and you remembered at the last moment. So you've got to bring out the supply table and you have a little chair that's plonked at the end. And that's where the MLRO sort of was sat or maybe, I've given everyone an insight into my friendship circle. I'm not too sure. But that's certainly changed, hasn't it?

Tim Tyler That's changed. You might be showing too much there. So of course, that's also the table that children might sit at. But if I've understood your analogy correctly, but sorry, carry on, James. No, no.

James Booth And actually what we've seen is a cycle where financial crime compliance, MLROs, MLCOs, nominated officers, BSAs in the United States have sort of shifted around that table and then there was a point in time where I think they'd be became the head of that table and there's a little bit of an argument to say sort of that cycle is shifting a little bit round again. But what we've also seen is that need of individual skills and competencies shift alongside that. Would that be a fair assessment, Tim, that I've made over compliance careers in the last 15 years?

Tim Tyler There's a lot contained, I think, within this, James, and it's difficult, I think, sometimes to know quite where to begin. I think a good place to begin is to go back further the 15 or so years, but actually go back 30 or 40 years. And the idea of regulating good governance and the way in which we identify and manage risk, even the idea of regulating our response to the money laundering and terrorist financing threat, they were barely on the radar. I remember when I was working in the police, I mentioned early in my career, I was working in the fraud squad in the City of London Police. As far as we were concerned, the banks were at best witnesses, sometimes victims of fraud. The idea that they would become involved on the front line to prevent money laundering, fraud, corruption and the like, which is what we've evolved to now, was unthinkable. It didn't even occur to us. If we wanted to work with the banks, we had to get a court order, a judge, had to authorise it, then we could get the information. And generally speaking, they weren't particularly helpful, if I can say that now, looking back 40 years. The idea that they'd have primary responsibility to protect us and prevent money laundering was, as I say, unthinkable. So we've seen this journey over 40 years in the financial crime prevention space. But to some extent, also, we've seen this journey in terms of the way in which compliance and governance and risk are regulated. There have been some key developments along the way. I think the whole issue with Enron became, of course, a big driver for a change in terms of compliance leading to Sorbonne-Oxley and other legislation in the US. And that drove change across much of the world. So, yeah, we have seen this evolution in the nature and the challenge that we face in the context of all of these different areas. But in terms of the roles and the organisation of the table that you describe, who sits at the head of this little table that's adjunct to the board or adjunct to the leadership of an entire organisation. I think that's interesting, and we could talk about it, but I almost think it's secondary to the bigger issue that we're now at the top table. I think as a capability as a sector, as a profession, we are taken more seriously, we have a role to play that is mainstreamed within organisations and we have influence that perhaps we couldn't even have conceived of 15 years ago. So I don't know, it's a long answer, James. Is that getting to

James Booth what you were asking? Yeah, I think we are and I think actually, today's not about talking about this at a private sector, organisational level. We want to make this about people and I think that's where the conversation, I hope, is going to evolve with that. Before we go through that though, Tim, however, people is the narrative and the little feature that I'd like to bring into my podcast series is what we call a bit of a rapid fire round, so we get to know the person. Are you okay with that? I'll do

Tim Tyler my best. Yeah, there's nothing controversial

James Booth so I'm fairly confident, unlike the last episode, that we need to add any explicit viewer listening is advised. I know that we're quite sound consummate professionals in that world, but eight or nine questions, Tim. I'm just going to fire at you the first thing, so the audience can get to know you, if that's okay. Okay, go for it. Coffee or tea? I'm sorry, say again. Coffee or tea? Oh, coffee. Coffee, my goodness. A bit of a ritual in your household, that, isn't it, Tim, from memory? Yes. Are you a morning person or a night owl? Neither. Okay. I could not tell the audience about the times that we've met in various hotels around the world and you retire early for the evening, but we don't need to talk

Tim Tyler about it. Yeah, I do. I'm not, I'm definitely not good in the night. So yes, on the basis of elimination, I'd say

James Booth morning. What was the first

Tim Tyler job you ever had? Well, that was before joining the police, I worked filling in time working in a trademark attorney's office as a runner. Okay.

James Booth What book or resource do you think every compliance professional should read? Well, that's hard.

Tim Tyler Yep. That is hard. I'm looking at

James Booth my bookshelf now and the one that always... I shouldn't answer on your behalf here, Tim, but I always think of Bill Browder and I think of you in the interview that you did and read Notice.

Tim Tyler That's, yeah. I wonder whether we almost need to step away from the many amazing books that are available that speak to issues within compliance and actually look slightly more deeply at the issue. So I'm going to go in a different direction altogether and I'm going to talk about Carl Jung or Friedrich Nietzsche, an understanding of psychology and human nature and the way in which we can better influence and guide individuals. And if the author is

James Booth listening, the ICA head office is on the website and Tim's signed copy

Tim Tyler should be on his website. Yes, Friedrich Nietzsche and Carl Jung were 19th century authors so they would be beyond the grave but nonetheless I'm sure it's very welcome. Sorry James. No, no, please, please.

James Booth What was the last thing you watched on Netflix, Tim?

Tim Tyler Oh my, Downton Abbey. I'm glad you didn't ask me that

James Booth question so we're going to move swiftly along. What's been your favourite city for a compliance conference and we already know that's not Cyprus now, albeit that's a country.

Tim Tyler Stockholm. Copenhagen was very good.

James Booth We had many visits there as well, didn't we Tim? Yes, yeah, yeah. If you weren't in compliance or financial crime, what career may you have

Tim Tyler pursued? Journalism.

James Booth One word colleagues would use to describe you? Thoughtful. I can say many people will disagree with that Tim, but it's your answer.

Tim Tyler Oh my, okay. What would you say then James? About you? Yes. What one word would people use? Regal. Oh my goodness, okay. I probably ought to move on, I wasn't expecting that.

James Booth Okay. Best piece of career advice you've ever received? Now, I've been on the receiving end of a lot of your advice Tim, so I know that you've got some good advice. I've had good and bad, but the word good here is subjective so I'll leave this one to you. So what's the best piece of career advice you've ever received? I didn't receive

Tim Tyler any meaningful career advice.

James Booth Okay, let me rephrase the question. What's the best piece of career advice? Yeah, I know.

Tim Tyler For the first 20 years of my career, I had no one actually giving me any kind of meaningful advice or support. I was just sort of finding my own way. And so, I think we can put too high a premium. on advice. And I think what matters most is that we figure this out for ourselves. And, now here it is. Figure out what you're working and if you're a leader, what your leadership style is.

James Booth Ooh, interesting. And it's of course correct if I'm wrong, Tim, seven different leadership styles, but that's a conversation for another day. Okay. One more question then. Now, this one I'm really interested to hear. What's next on your personal or professional bucket list? I'm asking the gentleman who's achieved it all, essentially.

Tim Tyler Oh, I absolutely haven't. But I think I'm moving away from the bucket list and sort of way of thinking of things. But I would like to spend... I'd like to challenge myself in a wilderness environment on my own for a period of time and see how well I could manage in those circumstances. I think that's probably what it would be. Okay.

James Booth There we go everybody. That's the raw unedited Tim. And Tim did not know what questions I was going to ask as well. But let's bring this back on now because I think people have, you know, individuals have now become the thematic of this podcast. And I'd like to talk about, Tim, the skills and professional development. And just for signposting for everybody, we're going to look at skills and professional development, how that compliance landscape is shifting, and then bringing in this new paradigm of AI in the compliance world for our skills. This is a bit of an unfair question really, Tim, but what skills do you think are going to be the most valuable, not just for individuals who are new to the compliance space, but also those seasoned individuals that need to keep up with changing development? So we're focusing on the skills here that you think will be the most valuable. We're going to be talking about

Tim Tyler AI shortly, and that needs to be at the forefront of our thoughts. Of course there's a need to understand compliance, to understand whatever field we're working in, in depth. Not knowledge, not the sort of thing that you can quickly derive by clicking on a keyboard, deriving 20 answers through Google or whatever, but a depth of understanding that enables you to look at different perspectives, to turn issues upside down, to create, a crisis within whatever it is you're doing and know how to respond to it. So a level of understanding and skills that match that and enable you to deploy that understanding. So I almost take that as a given.

James Booth Yeah, it's more of an evolution this, isn't it? As opposed to a rewriting of the script.

Tim Tyler Yes, but I mean, so as we're starting to think about AI, it's important that we hold on to that, but recognising that AI is going to have a full and wider role across businesses in all areas, including of course our area of compliance and counter-financial crime, then we need to develop those skills that enable us to work effectively with AI. I'm not necessarily talking about the coding skills, because it's possible that that will fall away because AI will be able to code itself in time. I'm talking about AI literacy, the ability to use AI to generate solutions the ability to ask the right questions of AI and to understand the output that it generates. But I think there's a bigger issue here. I don't know if it's the right time to come on to it, but I think there's a very real danger that we define future skills in terms of what AI can't do. So let me can I just unpack this for a moment James, is that okay? Please. So I often hear people talking about what we need we will always need people that have emotional intelligence, we will always need people that can see the big picture or we will always need people that can well, I mean not long ago we would have said drive a car now as it turns out AI can drive a car and it can do more and more diagnostics even in healthcare AI is able to do more and more of things that we've taken for granted that required human beings and there is a very real danger that if we anticipate the skills requirement five or ten years from now in terms of what AI can't do then we marginalise the human skills and the human contribution so it becomes that bit that the AI can't do and as AI grows and becomes more effective we'll become, or at least have the appearance of being emotionally intelligent we'll be able to undertake strategic planning with great accuracy and effectiveness we'll be able to do a variety of things I suspect that we can't anticipate at the moment if we define our role as simply what AI can't do we will squeeze ourselves out of the conversation so it's more important that we define our role as complementary to AI and not just the thing that AI can't do. Does that make sense?

James Booth It does and I think it lends itself to a theory I've been working around that this sort of convergence of technology and regulation and global risk it doesn't mean that the classic compliance toolkit if you like of understanding laws and policy and controls isn't that's not going to be enough on its own and just listening to you Tim I was making some notes and I've stripped out a few things and a few thoughts of my own and maybe we can unpack some of these. I've unpacked this into five areas you mentioned digital and data literacy and I think that data fluency and digital literacy isn't about being able to write code as I agree I think that's going to take care of itself but it's being comfortable with those analytics or the automation so understanding sort of how that machine learns to detect suspicious activity or how a human being can interrogate those large data sets as well as the AI and know the strengths and weaknesses the second one was critical thinking and investigative skills so we're talking here about technology doing more of the rules based heavy lifting which it has done for some time and humans are really going to be judged or sorry should I say valued for their ability to judge so whether that's connecting the dots or geopolitical awareness for things like sanctions or AML decisions or actually looking beyond a transaction so understanding its context and intent and that's where I'm not sure technology would be able to replicate. Would you agree?

Tim Tyler I think it's dangerous candidly to put any boundaries on where technology can get to I think it depends what you mean by critical thinking but I wouldn't rule it out but I agree with the spirit of what you're describing. These are things that are really important to us now and the ability to think critically can not only fill in the gaps around what AI can't do but it can complement what AI can do and maybe that's the way in which we should describe it. James, back to you. Yeah, of course. I mean the other

James Booth point that I was thinking about maybe this is in the spirit of every conversation that we ever have is this spirit of collaboration and we've talked for many years haven't we Tim about professionals needing to collaborate across disciplines, whether that's three line of defence breakdown silos regulator relationships but at the heart of all that are soft skills right, the ability to communicate, the ability to influence the ability to tell a story based on complex data, I think is going to be as important as the technical know how quite a big statement that isn't it

Tim Tyler my instinct says yes but I'd almost want to unpack it and challenge it because there's an argument in which we're moving away from the current way of doing things into a more transactional world into one where we are quite risk averse where the law and regulation is increasingly prescriptive and so it doesn't matter how strong your soft skills are what matters is whether the regulations allow you to do something I'm deliberately overstating it so don't take this on face value but let's take an example when I worked in fraud way back 40 years ago soft skills were really important and I was able to achieve an awful lot in an investigation or not achieve it if I wasn't doing it well but just by simply knowing how to ask the right questions developing the right relationships exploiting those relationships you know and so for instance I could get information from a bank even that was provided outside of court order or outside of a legal framework but simply because I knew the individual and they respected me and they knew that I wouldn't abuse it and so on now nowadays none of that happens everything in this space is transactional so it's governed by a series of very clearly defined laws regulations or internal policy or guidelines or process when you phone up and contact someone in an organisation whereas in the past you could kind of sweet talk a little I'm using this rather prosaically but it kind of comes down to that whether you're able to influence people now it doesn't matter how nice or friendly or how rude you might be you're still going to get the same outcome because it's governed by policy and procedure so I think there's a boundary around this and the use of the soft skills to collaborate but let's take that at a higher level if we're talking about collaboration between banks or between private and public sector and of course there's a lot of focus on this at the moment and we know that there's legislative gateways that allow that kind of collaboration to take place that they provide for those conversations which in the past would have been quite impossible because of legal barriers so yes at that level when you're talking about collaboration strategically and so on those soft skills are important but at the end of the day once a decision is made that this bank is going to collaborate with this organisation or this group what follows isn't dependent so much on soft skills as the well it is soft skills but it's not the same soft skills it's skills like tenacity and resilience and attention to detail rather than your ability to get on with people so that's a very long answer

James Booth the final part of that sentence Tim and forgive me for speaking over you but you've just got me thinking that actually I don't know I can't define whether this is a soft skill or this is a mentality or maybe it's both we praise AI for its adaptability but maybe we need to treat that as a soft skill as well so professionals in the compliance and financial crime community I think we have to stay curious and comfortable with change and I think that's maybe the biggest threat is that change and our willingness to embrace that change. I said something at the start about I think compliance professionals who really want to go far in their careers should look at different sectors and different jurisdictions. If I relate myself, actually my willingness to be curious and be uncomfortably comfortable with change, my willingness to learn and unlearn and relearn I think is really powerful as well and kind of embracing different approaches to that. Is this a mentality shift Tim or a scoff skill? What are your thoughts?

Tim Tyler Well I think I would call that a behaviour rather than a skill. So you your resilience or a bit like your integrity this isn't necessarily something that can be trained through a workshop or through a classroom this is something that you can develop over time but it's more like a quality. But I agree entirely. But then can I, you know I do on occasions like to challenge. So you said you've talked quite rightly about the importance, the ability to embrace change. You know lead change. And that can be really challenging given the pace of change. And also the fact that everything else around us might be changing. So it isn't one set of change independent of everything else. It's a series of interconnected things that are going on around us and changing. And that itself is challenging. But I think there's a danger that we're swept along with this. And going back to what you were saying before, that we lose the ability to think critically about it. And change for change's sake, we would agree no, that isn't necessarily the way to go. We need to ensure that if we are embarked on change, that it is thought through, it is measured, it is meeting organisation goals, it is legal, it is all the things that we would expect, rather than just oh, we need to do AI as an organisation. Or, you know, that's something I regularly hear. You know, the board is saying we need to do more with AI. Well, what do we mean by that? What are we trying to achieve from it? So, yes, to change, but we need to retain that critical thinking so that our approach to the change is mature and informed and measured rather than just, we're going to do this because we've been told.

James Booth I'm going to stay on this theme of pace of change, actually, Tim, and bring this up to a more national level. And then I'm going to step it back to people again. We see a lot of noise now from regulators, and I wouldn't just say noise now. We see a lot of power and a lot of punch coming from regulators, and I'm so pleased to see that AI has been one of those adaptations that actually people realise that the rate of pace is fast, but we're going to embrace it. But do you believe, or what's your opinion, should I ask, around the regulatory approach to this? Are they moving fast enough to keep up with the challenges that we as the compliance professionals are facing?

Tim Tyler I think by its nature, there's a likelihood, danger, that regulators will be one or two steps behind where they could be. Again, having worked as a regulator or within a regulator's organisation, quite rightly, it needs to be cautious and measured. It can't afford to make strategic errors because of the impact that that will have across sometimes hundreds of thousands of businesses that they regulate. And so that means that responding to rapid change becomes particularly difficult. So I think there can be a gap. I think sometimes it is very difficult to justify. So look, for instance, at a global level, FATF, when did we last, when did FATF last overhaul and meaningfully review the 40 recommendations? And we know that was in 2012. Yes, they're, they've adjusted them slightly and adapted and revised. But the last overhaul was in 2012. So the 40 recommendations we have today are the same 40 recommendations that we had all those years ago. So that's not to me, that's not keeping up. But there will always be a little bit of a lag. But for me, I think the bigger issue is, and once again, I'm slightly taking you off course, but I think the bigger issue is there needs to be thought around principles that are pinning change. And I'm not sure there's enough thought around that. So let me give you an example. The use of artificial intelligence in the context of regulated activity to monitor transactions, to monitor customer behavior. We know that that has the potential to accelerate the way in which we approach investigation or identifying suspicion. We know that that increases, the power and the intrusiveness of the organization's ability to monitor customer activity. Would you agree? Is that a fair summary?

James Booth Yeah, yeah, absolutely.

Tim Tyler But I wonder whether there's been any thought to the flip side of this. Now, by that, I mean the level of intrusion into our customer activity. So let me give you an example. If I want to, as a police officer, if I wanted to investigate someone, I needed to have authority to do so. I needed to act all ways where I could justify it. I needed to show that I was working within legal boundaries. And for instance, if I wanted to look at someone's bank accounts, I would still need a judge in chambers to authorise that activity. And normally that would require a serious arrestable offence to have been committed. And I'd need to demonstrate to the judge there was no reasonable way I could achieve that information through any other means. Now, if you compare that to what banks are doing, banks are automating a process that looks at the potential for money laundering when there's no actual investigation in the first instance, there's no suspicion that money laundering has taken place. It is just simply an automated process that banks now are putting into place that is incredibly intrusive, that looks back over sometimes years of multiple transactions and now using AI is looking across multiple different other sources of data from the internet, social media, from geopositioning and the like that will look at the peer group of a business, for instance, to determine what are the price points that we would expect our customer to be using. Is this a growing business or is it a contracting business? All of these things are enabled by AI where the regulatory is saying we expect you to do this and we expect you to use all information that you currently hold in relation to your customer in the context of this. That is incredibly intrusive.

James Booth We spoke about this, Tim, about the private sector being this lake of data. I am going off topic now, but forgive me for interjecting.

Tim Tyler No, no, not at all. You're absolutely right. And I wonder whether before we rush headlong into this utopian view that AI can join the dots and do an amazing, amazing things. And it can. And this has been proven. We're seeing some great results in terms of identifying suspicion. One thing we need to think about is, well, what's the proportionality here? Actually, at what point do we say, this has gone too far? You're effectively investigating me and I've literally done nothing wrong. Or, mate, I've stepped on the cracks of the pavement. I've done something really quite marginal. And now that triggers a formal inquiry. And that, I think, is thrown into contrast if we look at the other side of this coin, which considers the fact that we're mandated within regulated entities to look for money laundering. And what we're essentially doing in this is inverting the filter. So we are constantly looking for footprints, fingerprints of possible money laundering or other financial crime. When we, when law enforcement knows, law enforcement know who the 30 or 40,000 organised criminals are. They know. And so what we're trying to do within the regulated sector is identify what organisation, what law enforcement already know. So there's a kind of perversity around this. Albeit that, of course, what we would provide law enforcement is active, live information, intelligence about what those individuals are currently doing. But we are sifting through haystacks to find, then when we find the needle, of course, the final piece of this jigsaw is we provide the suspicious activity reports to law enforcement. When we find those tiny little needles, we report it through SARS. We've got nearly a million of these every year in the UK. And we know that law enforcement simply don't have the resources to do anything meaningful with it. So before we're carried away with AI, I think we need to actually think about the foundations of this. The proportionality, what we're trying to achieve, the best way in order to realise those objectives. And do we have a balance between the law enforcement capability and what's going on in the private sector? Because at the moment, it seems to be heavily weighted towards the private sector. I mean, 42,000 people, I think, on one measure. About 42,000 people working counter-financial crime within regulated entities in the UK alone. And how many police responding to all their work Well, it's measured in a few hundred.

James Booth And, yeah, you know, again, we've spoke about this. I believe there is an inherent culture at the moment, globally, that we're still that fearful of enforcement. And you have a situation in the private sector where people are genuinely scared of being on the next Netflix special because they made a decision that wasn't quite right and got the organisation down. But that is where the most deficiencies are being seen, arguably, because in the private sector, if you have a situation where that noise that historically a human being is going to make a decision based on candidly outdated data sets, CDD, because CDD is almost instantly out of date and there's way more regulatory tick boxes about how CDD or EDD is done to actually informing us of true and genuine authentic suspicion. But that's where AI is making a really, really healthy impact. And I think what we are definitely going to touch on that in a moment, Tim, so we're clear on that one. But the challenge, of course, is we're trying to talk about this as a tool to combat the money laundering and the financial crime. And this isn't just an AI issue, this is, I think, a cultural issue. But we don't want... We have this conversation regularly again, don't we? And the one thing I always become fearful of is just by simply not understanding the issue, we don't want to create a culture of, well, what's the point in doing any of this because we're not making meaningful impact, because that could not be further

Tim Tyler from the truth, could it? No, I agree. And this isn't a conversation that I would typically have with, for instance, some of the classes that we both work with periodically in looking at anti-money laundering and so on, because it can seem like, well, what is the point? But there needs to be recognition and a national debate. And maybe that's starting to happen in some pockets around the effectiveness of our approach. The danger is that we're resource-constrained. We're rushing to solutions without necessarily thinking them through beforehand.

James Booth Yeah, there's a really useful resource, and I'm just considerate of time, because I sort of knew that we would snowball and start talking about these issues as we've done over years, over coffee and various other refreshments. But the FATF issue day publication in 2021, I believe, I stand to be corrected on that, so if any of the viewers want to comment on the thing, but I'm fairly confident it was, and that was a publication known as Opportunities and Challenges of New Technologies for AML and CFT, and that was quite a flagship report at the time, and I have, of course, read it, and it did talk quite heavily about AI, machine learning, data analytics, and reg tech, and so on. So I would sort of encourage our audience to take a few minutes to read that over coffee the following morning after listening to this, and maybe you take a bit of a litmus test and see, you know, the FATF spoke about this now almost five years ago. Where do you feel personally? And what's the rate of pace that you think regulators are showing us? But with all that said, I want to bring it back to people again, because a nice narrative and that was going to take us into the final part around AI in compliance. This is where the importance of training comes in, and of course, we both have extensive training backgrounds, but how important at this point do you think certifications and formal training versus on-the-job experience training is going to help compliance officers develop their skills over the next generation?

Tim Tyler Both are important, of course, and I think we would recognise that there isn't a substitute for either. So on-the-job training is...

James Booth I'm going to add a word in that, Sam. I'm going to say effective in the job training, not just a farcical tick box I know how to spell AML, but a effective training. So that's

Tim Tyler helpful, isn't it? When you add that caveat because we can differentiate between poor on-the-job training which is just get on with it and then there's a very real danger that we as individuals will do something because we do it without really understanding why what the alternatives are and what to do if it goes wrong. But we just do it because we're copying others. That's not really on-the-job training, that's just learning to copy. On-the-job training, ideally, means that you're supported by someone who can mentor or coach you through what you're doing. Of course, that means slightly different things in the work context. But it's about doing more than just, as you say, ticking the boxes and completing the forms. It's about understanding why, what the bigger picture is, what to do if it goes wrong, as I say. And that enables individuals to master what they're doing, to have a degree of control over it. And that enables them to grow within the role, to enjoy it more and potentially to move on into wider and other roles, sometimes more senior roles in time.

James Booth Of course, a lot of these skills are transferable as well, aren't they? So you've got the aspect of technical knowledge and then this thing that we keep coming back to of soft skills and it's the soft skill aspect or the competencies that can be transferable, can't it?

Tim Tyler Yes, absolutely. So let's take an example to bring this to life. So that's from imagine, for a moment, imagine that we are deployed into a onboarding team with responsibility to know our customers, to undertake the customer due diligence requirements, ID and V, understand beneficial ownership, understand the nature of the relationship. So there are two ways we might do this and if I can just polarise it for a moment, we might do this in terms of these are the forms that we have to fill out, let's just get on and fill out the forms and a lot of the time the computer will do this and the customer will do this and we just need to make sure every box is ticked, that's one way, another way is to understand fundamentally what customer due diligence is, what it's trying to achieve why it matters and then use that understanding to inform the approach that we take when we're talking to customers, when we're checking the forms when we're completing them ourselves now it may be that in the short term the output remains the same, you get forms that have certain boxes filled in that allow the system to process it and inform decisions are made, but the moment something steps outside of the norm or as things develop and change, then you'll be exposed in the first instance because you don't have an understanding of why we're doing it and the context but in the second you'll be able to adapt and to drive that, now go a little bit further, you talked about the ability to transfer skills well if you have invested the time to understand the context for what you're doing the detail, what looks what good looks like and so on then it's transferable into another area, not because you know about the particulars of customer relationships or whatever, that's not the thing that's necessarily transferable, it's the ability to make those judgements, to understand to know what questions to ask and so we have to be really careful when we talk about transferable skills, it's not transferable knowledge it's the ability to do something with the knowledge which might be entirely different

James Booth The application of the knowledge of managing the issue so to speak and I think this is where this is almost a perfect and ideal opportune moment to bring the AI in compliance into this because that's where we'll improve our knowledge but these are where the skills that will be transferred in our investigative capacities are really going to help us but let's set a motion because I think we're all very familiar with the principle of how AI is working and the efficiencies but I want to set a motion Tim and I want us to either agree or disagree and justify our decision behind this. The motion is AI will reduce compliance headcount do you agree or disagree?

Tim Tyler So if it's a simple question yes I agree it will.

James Booth It will reduce headcount of the roles or will it just simply be a redeployment of where human beings are going to work? It will reduce headcount

Tim Tyler it won't just be shuffling within organisations. Well quite reasonably because it's a huge overhead meeting for instance anti-money laundering and other compliance requirements, organisations will reasonably want to invest in AI and to see a return on that investment and that will mean for instance reducing headcount. So I think there will be a reduction in headcount.

James Booth So then the individuals that continue to remain and focus in those roles I use the investigator or analyst depending on what part of the world that you're in An analyst at the moment is and I'm speaking from seeing this in person very very recently, as recently as yesterday an analyst's role is consumed by a lot of rubbish and a lot of noise and that's picking up a simple transaction monitoring alert that has triggered, a rule has been broken based on one of two things. Either a preset limit that the organisation has set or a rule that has been broken against what that institution knows about the client. That's where the Achilles heel is because I've already alluded to the fact that data is so fluid. I'll give you a quick story. I remember in an institution there used to be something like 30,000 alerts would hit on a particular day and that's because it was the day that that particular organisation paid bonuses to their staff and the system wasn't able to calibrate. So what you would have is you'd have all these alerts that would generate, in fact more, because members of staff were married and it would trigger in joint accounts and individual accounts. So you have time and resource of individuals that are looking at noise and because they're making a decision based on a data set, it's the oldest rule in the book as an investigator, is the activity in line with the profile of the customer. Well, forgive my language, Tim, but it never bloody is, because CDD always changes and a customer relationship changes. Where I see this efficiency, not just from a speculative, but I see this, that resource, that headcount of investigators now, means that they can actually look at the stuff that is genuinely unusual or is really touching that threshold of suspicion. Where I potentially see some of the reductions coming is in a lot more of the governance side of it, or individuals that are constantly calibrating and recalibrating the transaction monitoring tools, because AI is going to get better, machine learning is going to get better, and we talked about data literacy, well those investigators now are going to be able to talk back to the AI about what they're observing and what they're seeing, and I think this underpins the risk-based approach, right? Deploy your resource where the risk is highest, and I think that's where the true efficiency is going to be found

Tim Tyler personally. Well, no, I agree, and there will be, going back to your earlier question, there will be a certain amount of redeployment, so people will move between roles, and I know that some global banks are recruiting looking for skills of agility. They don't mean the ability to jump up and down 20 times in a minute or something but the agility to, and it goes back to what you were saying before, the agility to move between roles without loss of confidence loss of those transferable skills and so on, so there will be that kind of movement within compliance and we should welcome and anticipate that.

James Booth So if an individual, Tim, is looking at these roles at the moment and whether they're starting out in compliance or whether they are considering their next role, what do you think a compliance professional should be doing to prepare themselves then to work effectively, that's a key word again, effectively, alongside some of these AI tools? It is of

Tim Tyler course a good, it's a compelling question and the answer I think is going to depend to some extent on the circumstances and the context for the individual where they are in their careers and what their aspiration, what their goals are but typically I would expect them to do several things firstly to be on the front foot so by that I mean don't wait for things to happen be part of the conversation as much as they are able to to expand the envelope in terms of the way in which they can influence what's going on around them so volunteering for opportunities to do new things to deliver training, to raise awareness or be a champion or something similar always proactive about growing in your role that's one thing secondly, do the training and get the certification going going back to what you were talking about before so that you can not only have the skills but you can show the world that you've got those skills and that can travel with you as you move between roles

James Booth it is a differentiator isn't it the qualification aspect is a differentiator but I would just add a very careful caveat to this one a certification is not the licence for you to get the role it demonstrates competence that's recognised and it's if you're going against a candidate that hasn't got it but I think that's where it lends itself again to these opportunities that you talk about and the willingness and that I think is one of the real foundations of healthy culture but forgive me I spoke over you there Tim

Tim Tyler No not at all and I agree it's by no means a guarantee if you've got a qualification it's reasonable then for an employer to ask well what have you done with that qualification so it can actually become a vulnerability if you've sat on your hands and just done nothing with it then you might be able to explain that and say well that's where I'm content, that's where I'm happy and that would be fine but if you are trying to for instance get promotion or something similar and you've not done something proactively actively with that enhanced level of learning, if you haven't been proactive in trying to champion what you're doing to become part of decision making to become part of maybe working groups that are exploring better ways of doing things all of these little opportunities that come up in the workplace, then it needs for us to engage with them but the third component here, so we've talked about one being proactive, secondly accredit what we have and get the qualifications and take understanding and skills to the next level, but the third thing of course is anticipating the way that things are going to change then we do need to have that AI literacy, and maybe within compliance, we need to have it more than other parts of the business because we've got a role that doesn't just focus on how AI is going to have an impact on our particular world within compliance we've got a role to serve the entire organisation, to ensure that the governance is right that risk is effectively being managed as AI solutions are being adopted across the business, so it becomes even more important that we've got a good grasp and an understanding of this technology and the way in which we interact with it.

James Booth And again, to put a lovely ribbon around this, if we were to package it for our listeners, Tim there is so much well, knowledge is critical, right? So we're talking about evolution, we're talking about development of skills we're talking about willingness to have a healthy culture there is so much brilliant free stuff out there for people to learn about what's happening and what's going on at the moment. I know that you and I are collaborating over a number of events Tim and AI is going to be a thematic in some of those. I know you have your online series and for those that have not checked out Tim's LinkedIn or the ICA's LinkedIn for weekly events we've got our webinar series and we've got various in-person events. The point I'm trying to say is that education can cost money but there are still lots of resources available to people that will allow you to stay on the front foot of that knowledge aspect as well and lots of great free courses out there as well as some paid ones as well so we are coming into the last few minutes Tim and again as I suspected we could have continued talking about this for hours if not all day or all week if I could just ask for one thing before we do wrap up, if you had to give one piece of advice to either a young professional that's considering a compliance career or an individual who's maybe looking at a career change or even a seasoned compliance professional that sort of needs that encouragement to keep going, what's the one piece of advice you would offer to those individuals? You can hear a silence,

Tim Tyler a deafening silence, and I'm struggling with this because, and the reason I'm struggling is because the advent of AI and all the things that we've been talking about is changing the landscape, and advice that I've given in the past I'm not sure is as useful as it was back then. So in the past, I would have said be very clear about what you're trying to achieve, what you're looking for from your career, and organise what you do around that. So have a long-term vision in mind, and hold that front and centre in every level of decision-making, day-to-day, minute-to-minute even. You are working towards a goal. It might be that you want to work at a senior level. It might be that you want to be on a board. It might be that you want to work internationally. Have that in your mind, and rather than just flip-flopping around between different opportunities and just taking opportunities as they come without necessarily having a direction for it, look towards building towards that vision, your ambition. That's more difficult now, I think, because our careers are more fluid, and so I think the advice has to be recognise that you may not be able to achieve what you currently think of as your aspiration. Recognise that you may need to adapt and adjust the way in which you use your skills, but know what your skills are and have confidence in the way in which you use them.

James Booth You know, I love that, Tim, because as you were explaining that, long-term vision is, I'm sure, what every compliance professional will look at, but you are right, there is so much that's changing in so many moving parts, so to complement yours, Tim, I think I would say, in order to achieve that long-term vision, recognise what your short-term vision is as well, and that's known as the compound effect. If anybody's interested in getting into some of the behavioural science, look at the compound effect. But in order to achieve that long-term vision, constantly look and evolve your short-term vision as well. It's a good

Tim Tyler observation, and I think to complement that, it's true in life that if we look back at what we've achieved in the last week, we're often dissatisfied. We think we haven't done enough. But if we look back at what we've achieved over the last year, then normally we've got good reason to be proud. So we need to be very careful about what our lens is and how far back or how far forward we're looking.

James Booth That's a really powerful statement, Tim, and that resonates. It resonates with me personally as well. So thank you for that. Tim, this is not going to be the last time that we work together, so I just want to say a personal thank you for taking the time out of your day. I'm so confident that our listeners are going to take a great deal away from that. Keep in touch. But Tim, thank you. Thank you for joining us.

Tim Tyler James, thank you very much for the invitation. It has been a pleasure. Thank you, Tim.

James Booth For our listeners, please don't forget to like, comment, subscribe. If you are interested in being a guest, please do DM me on LinkedIn. But if not, that is everything until the next episode. Take care, everybody. I wish you all well.