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Putting AI to Use in Regulatory Compliance

Harnessing the power and potential of AI in regulatory compliance for financial services can give banks a competitive advantage in today's data-centric world. Let's see some practical examples.

Here are three primary and practical ways that Artificial Intelligence use cases can be applied to best capitalize on the value, power, and potential of next generation Regulatory Compliance advancements.
• Simplify the process
• Make the process "smart"
• Increase efficiency

By strategically leveraging AI-powered Regtech solutions, banks can overcome the daunting regulatory compliance challenges faced today – in a way that controls costs and improves proof of compliance.

Top Use Cases

1. Simplify the Regulatory Compliance Process: Automating Repetitive Manual Tasks
Regulatory compliance processes are largely focused on collecting data from various source systems, cleansing the data, and checking it for accuracy before submitting to the regulator in the mandated format. This process is typically labor-intensive and requires several manual interventions and repetitive processes that can be automated using the power of AI.
Automation and consolidation can significantly reduce the time and effort required for compliance while also minimizing manual errors.

2. Make Regulatory Compliance Processes Smart: Better Decision-making
The biggest value of using AI is its capability to understand and predict patterns in risk; manage the data; and gain insights on the data. Banks must adopt a data lake architecture to store data coming from multiple data sources and deploy a real-time analytics engine for a pattern recognition solution capable of tracing hidden risks. This technology can be used to comply with a variety of regulations including those that address financial crimes, money laundering, fraud (AML, MiFID II, FinCEN) and others.

3. Make Regulatory Compliance Processes Efficient: Significant Savings
Advancements in Big Data, AI, and Cloud enable institutions to automate processes and solution workflows that previously required dedicated human intervention. Additionally, fintechs are offering easy adoption models such as Software as a Service (SaaS) and/or implementation working directly with existing systems within the institution. This flexibility, along with the benefits derived by AI automated solutions, are adding efficiencies while making regulatory processes simpler, smarter and value-driven.

Show Me the Numbers

The Regulatory AI results are real, and often dramatic. Consider the following findings from the recent Accenture Technology Vision survey:
• Nearly half of the financial institutions surveyed indicated they've achieved 15% or more in cost savings from automating systems within the past two years
• Some institutions report reduced costs by up to 80%
• The time to perform tasks was reduced by up to 90%
• AI-based regulatory solutions showcase improved capabilities in keeping check on local regulatory changes and controls, while also providing increased data quality due to fewer human errors

Conclusion

Banks should seize the opportunity to leverage Regtech AI for competitive advantage. Don't spend good dollars after bad perpetuating cumbersome and ineffective labor-intensive processes. Let Regtech AI do the heavy lifting to automate, streamline, and improve processes and workflows for Regulatory Compliance, Reporting, Risk Management and Transaction Monitoring. Using AI-powered regulatory solutions empowers banks to improve ROI, safeguard their assets, demonstrate proof of compliance, and free up resources to focus on value-add customer-centric activities rather than manual administrative tasks. There's a lot to like in that equation. 

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Andrew Beatty

Andrew Beatty

Head of Strategy, Banking

FIS

Member since

17 Sep 2018

Location

Toronto

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23

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