Although burdensome, every business must ensure its operations and procedures are in compliance with the regulations that have been set for its specific industry. Artificial intelligence (AI) may be able to lighten the load and make compliance easier for companies and regulators.
Regulatory agencies are put into place to oversee various industries, such as the healthcare industry, financial industry, entertainment industry, and more. In an effort to protect those who are affected by these industries, the regulatory agencies develop and enforce strict regulations that each company in those industries must follow. These regulations are also meant to keep the economy growing and thriving.
Regulations are newly created and revised every day, making it extremely challenging and time-consuming for a company to maintain compliance. The difficulties of following constantly changing regulations have caused some organizations to seek technological help, known as regulatory technology, or Regtech.
Regtech’s purpose is to ease the burden of regulatory compliance, making the task more manageable. There is hope that the duties of the compliance team could one day become fully automated.
For the time being, compliance professionals are still needed, but thanks to AI their job is changing. Now their training must include machine learning, which enables compliance professionals to carry out their work more efficiently and effectively.
The desire to automate compliance tasks is understandable, considering how complex and tedious it can be to maintain compliance.
Here is a brief overview of what happens in the compliance department:
But don’t think regulators have it easy. These agencies are required to oversee all entities that belong to the industries they regulate, but keeping track of every organization is no easy task.
They must ensure every organization is compliant by reviewing their documents and processes. If any of those companies fail to comply, the overseeing agency is responsible for carrying out legal action.
AI technology can assist with compliance, making it much easier for regulators and companies to handle compliance procedures.
Initially, AI’s use for compliance may be limited to helping organizations understand regulations, providing insight into the steps and actions that need to be taken in order to comply. However, AI may eventually take over the entire compliance process, allowing humans to spend more of their time and energy on other business responsibilities.
Although we haven’t yet seen AI’s full potential for assisting with compliance, here are some of the ways that AI can help right now:
By now, it should be obvious that AI can be a very helpful tool for companies and regulatory agencies. This advanced technology allows businesses to focus on other tasks that lead to growth, instead of getting bogged down by complicated regulations. In addition, AI helps regulators by keeping track of all businesses in the industries they oversee, ensuring they don’t miss or overlook any fraudulent activity.