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The AI revolution in Compliance.

Posted by: Tom Morris


Now, more so than ever, regulatory compliance is a key issue for not only financial institutions; it is now becoming a requirement for companies internationally. With the introduction of the General Data Protection Regulation (GDPR) looming, to be introduced in the May of 2018 alongside new money laundering regulations this year, companies are finding it increasingly difficult to avoid hefty fines handed out for failure to comply with such regulations. Earlier this year the FCA imposed their largest ever financial penalty to Deutsche Bank for AML control failings. The fine was to the tune of £163,076,224; making it crystal clear to see why companies and financial institutions are beginning to take regulatory compliance more seriously by the day.

One problem organisations face is the growing list of individuals they should be keeping tabs on. Stephen Ball, VP of Sales at ComplyAdvantage, talked about this in his interview with FinTech Finance – “ComplyAdvantage has used machine learning and artificial intelligence to create a proprietary dynamic global database of individuals, organisations and their connections that pose financial crime risks”. The reality is, without AI and machine learning, organisations will continue to struggle to keep up with which individuals they should be monitoring and who those individuals know. These technologies are capable of monitoring not just customer behaviour, but also criminal activity in the media thus allowing them to create a concise and dynamic list of threats.

Just one look at the up-and-coming companies within the compliance and RegTech space will show exactly how relevant these technologies are becoming. PlanetCompliance have compiled an ever-adapting RegTech Top 100 Power List. This is a list of the most influential RegTech firms, calculated using their algorithm which analyses the firms’ activity across the internet, as well as what’s being said about them on all social media platforms. Within the top 10 firms alone, 7 of them either currently use AI and machine learning or have plans to begin doing so, and this number will only continue to grow.

As the list of regulations that organisations must comply with continues to grow, and sanctions similar to the Jan ’17 Deutsche Bank fine continue to be imposed, firms will be looking to meet AML and Counter Terrorist Financing laws no matter the cost. As the money in this industry continues to grow, we will see more and more software companies in the RegTech space invest in machine learning and AI technologies in order to keep up with the competition.

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