Anti-Money Laundering Machine Learning Pipelines; A Technical Analysis on Identifying High-risk Bank Clients with Supervised Learning

Anti-money laundering (AML) actions and measurements are among the priorities of financial institutions, for which machine learning (ML) has shown to have a high potential. In this paper, we propose a comprehensive and systematic approach for developing ML pipelines to identify high-risk bank clients in a dataset curated for Task 1 of the University of Toronto 2023-2024 Institute for Management and Innovation (IMI) Big Data and Artificial Intelligence Competition. The dataset included 195,789 customer IDs, and we employed a 16-step design and statistical analysis to ensure the final pipeline was robust. We also framed the data in a SQLite database, developed SQL-based feature engineering algorithms, connected our pre-trained model to the database, and made it inference-ready, and provided explainable artificial intelligence (XAI) modules to derive feature importance. Our pipeline achieved a mean area under the receiver operating characteristic curve (AUROC) of 0.961 with a standard deviation (SD) of 0.005. The proposed pipeline achieved second place in the competition.