BAKU, Azerbaijan, October 20. The Financial
Monitoring Service of Azerbaijan is testing artificial intelligence
(AI) technologies in pilot mode, Azer Abbasov, Deputy Chairman of
the Board of the Financial Monitoring Service, said at the
Sustainable Business, Corporate Governance, Risk and Compliance
(GRC) conference in Baku on Tuesday, Trend's correspondent reports.
He said that while AI creates new opportunities, its
implementation also raises a number of issues related to data
security, data quality, and proper training of the system.
According to Abbasov, systems established under the relevant
presidential decree and existing databases provide an important
foundation for introducing AI in financial monitoring. The
technology has been undergoing testing for approximately one to two
years.
"Artificial intelligence is a relatively new concept and is
evolving rapidly. It analyzes available data and draws logical
conclusions. The key issue is ensuring that the data is analyzed
correctly and that the resulting conclusions are reliable," he
noted.
The deputy chairman emphasized that data protection is
particularly important in the Financial Monitoring Service's
operations. Its databases contain not only personal information but
also tax, banking and commercial secrets, as well as other
sensitive data.
According to him, international compliance requirements impose
strict restrictions on the storage and processing of such
information. Particular attention is therefore paid to server
infrastructure and data security.
Abbasov said that entities subject to financial monitoring
requirements submit relevant information to the service about
transactions they consider suspicious. However, analyzing only this
information is not enough to make full and effective use of AI's
capabilities.
"If the data consists solely of information submitted by
obligated entities and no additional databases are available, the
opportunities to enrich that data using artificial intelligence
will be limited," he said.
The deputy chairman noted that under the standards of the
Financial Action Task Force (FATF), the objective extends beyond
identifying suspicious transactions. It is also important to ensure
that relevant reports are submitted correctly, improve routine
reporting processes and prevent unjustified reporting when there
are no reasonable grounds for suspicion.
He emphasized that the effectiveness of AI depends on two main
factors: the level of its analytical capabilities and the quality
of the data used.
According to Abbasov, the service currently operates an AI
system on its local server. The same data is analyzed using both
traditional analytical methods and AI, and the results are
compared.
He said that further development of the system requires the
establishment of relevant behavioral models and continuous AI
training. Since the system is not connected to the internet, its
improvement must be carried out primarily by the service's own
staff.
"To use artificial intelligence effectively, it must be trained,
behavioral models must be developed, and its results must be
continuously evaluated. At the same time, a cautious approach must
be maintained, taking into account the risks that may arise from
the introduction of new technologies," Abbasov added.
According to him, when implementing AI in financial monitoring,
protecting data confidentiality, ensuring the reliability of
results and managing risks must remain key priorities alongside
technological innovation.
