Artificial Intelligence, Blog, Risk Mitigation

Compliance Risks & Artificial Intelligence: a Fruitful Meeting

We have already written about the fact that Artificial Intelligence (AI) is being used frequently in the financial services industry. Banks are introducing AI systems for risk management and also for supporting decision making for investments, which relies on enormous amounts of daily transaction data. Any industry with compliance requirements that involve large amounts of data can benefit from the advantages of AI.

In compliance, AI can be used for much more than unlocking the value in content. AI can provide organizations with the ability to process huge amounts of data either in search for specific documents or to screen communications for money laundering, insider trading, identifying third-party risks, etc.

Today, AI is already being used to help compliance professionals make sense of the vast volumes of data they manage daily, including regulatory changes and updates, breaking news and KYC-related documentation received from clients. AI in compliance can be applied in several ways:

  • Advanced tagging: AI systems can link people, places, facts, hidden relationships and correlate seemingly disparate information contained in even huge numbers of documents and can also score the data to communicate the relative importance.
  • The combination of AI and Natural Language Processing can reduce exposure and enhance due diligence processes: an organization’s ability to use the knowledge contained in unstructured information can be improved by understanding the meaning of words in context.
  • Removing the “noise” in information: AI technology can identify duplicate content to cut through the noise and reduce the amount of content that needs to be reviewed to make better, more informed decisions.

The increasing use of AI in Risk Management will impact the way firms and financial services organizations manage their risks, allowing them to focus on analytics and spend less time in managing the risks inherent in the operational processes.

Through AI technology, a compliance system can improve the automatic management of different activities such as checking transactions for indicators of fraud or other malfeasance or comparing different sets of data to check irregularities. By automating processes, humans can focus on more sophisticated analysis of irregularities and more strategic compliance concerns.

AI is here and it’s time for Risk Managers and Financial Services to embrace the benefits of this technology. Correctly applied, AI technology can be harnessed to reduce compliance burdens, lower costs and free compliance teams to focus on areas of greater value-add within their organizations.

At Expert System, we combine AI with speed and scale to help financial services organizations discover insights, investigate questions and empower decision making processes in real time. Contact us to learn more!


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