Compliance and game theory

Game theory is a toolbox offering various analytical instruments that can be applied across a range of areas, for example in economics and law. In the simplest model, the “players” are a potential bank customer and a compliance officer. The game – onboarding, for example – is subject to particular rules. In the best-case scenario, the customer will be accepted and the compliance officer will not have any problems with them. In the worst-case scenario, the potential bank customer will be turned down, but the compliance officer will still experience problems.

In game theory, a disbursement feature defines success or failure. Customers can generate revenue for a bank – or fines. It’s not surprising that the compliance field has not yet employed game theory to any great extent. Compliance games feature complex interactions that are hardly on the same level as Parcheesi or the prisoner’s dilemma. However, it is to be hoped that game theory approaches will generate added value in compliance processes in future.