Using artificial intelligence to drive compliance

There are many different applications for artificial intelligence (AI). Some are ready now, such as using the processing power of AI to crunch big data to gain customer insight. Others, such as deploying AI within driverless vehicle computers might be another year or two from being fully ready. But amidst the discussion around AI, one element of modern business is generally overlooked – compliance and governance.

To be compliant and on the right side of governance laws around the world is incredibly important. The European Union’s General Data Protection Regulation (GDPR) that comes into effect on 25 May 2018 is a high-profile example, with every organisation – irrespective of where in the world they are located – having to comply with GDPR if they hold or collect data on European citizens. Failure to do so will results in fines of up to €20,000,000 or 4% of an organisation’s annual global turnover, whichever is greater.

Yet many organisations continue to manage their compliance and governance functions manually, using no more than an Excel spreadsheet to stay on top of increasingly complex regulations. What challenges are organisations facing with regard to compliance and could AI be about to drive a new era of automated compliance?

 Compliance challenges 

Compliance is a never-ending process for businesses and the regulatory requirements across most industries are evolving constantly. This is especially true in heavily-regulated industries such as financial services (FS). New regulations such as MiFID II and MAR increase the regulatory requirements for FS firms and initiatives yet to take effect such as GDPR will also impact on what is needed to remain compliant.

Barriers to international trade are much lower in modern business, which means that many organisations do business in an array of different countries all over the world. Each country (and trading block, such as EU) has their own regulations and compliance requirements which makes the task even more of a challenge.

While most larger organisations have their own compliance officers and teams, liaising with regulatory bodies and governments, they are frequently still managing compliance manually. Such approaches can leave an organisation vulnerable to rapidly changing circumstances and at risk of facing penalties for non-compliance. It all means that attempting to stay on the right side of all this regulation can feel like a major challenge.

Digital compliance

However, there is another way of managing compliance that smarter organisations are already using – digital compliance, an automated approach that ensures compliance and takes the strain from beleaguered compliance teams.

For effective compliance, you need precision, to be systematic and you need to be up to date. This can be done using a spreadsheet, database or SharePoint, but these methods all require human input, and humans are fallible. But if you have an automated tool that takes away the hassle of managing compliance, it mitigates the risk of failure much more effectively.

This entails a combination of automation of tool, along with input from industry experts and thought leaders, that can help map the compliance requirements faced by an organisation, across territories, sectors and a range of other areas.

But for 2018, the next wave of compliance could be based around artificial intelligence. This is something the Financial Conduct Authority (FCA) is giving serious consideration to. The independent UK financial regulatory body is looking into how AI could be used to enforce regulatory compliance, and is evaluating a number of options that would help reduce risk and allow the FCA to put out rules which are written manually but can be fully and unambiguously interpreted by computers at financial firms.

AI and a new wave of compliance

Although compliance is a business function relatively untouched by digital technology, the computing power that AI offers means that organisations will increasingly adopt AI for governance and compliance over the coming years. However, we probably aren’t quite yet at the stage where AI-enabled compliance functions will completely replace humans. Compliance officers will continue to have a major role to play in most organisations, and the deployment of AI should be used to enhance such teams, not replace them.

Eric Berdeaux is CEO of OXIAL, the New Generation GRC solutions provider 

OXIAL’s New Generation GRC solutions are entirely built to address some of the greatest challenges impacting organisations that

are faced with Risk Management, Internal Control and Compliance and Audit. OXIAL’s integrated GRC platform enables

organisations to become more efficient and effective in mitigating risk by integrating and automating GRC processes on a global

scale.

Featuring intuitive and powerful tools that make it possible to respond to fast-evolving risk environments, OXIAL makes it easy to

synchronise corporate governance, enterprise risk management and corporate compliance activities and undertake real time

monitoring across all business and IT processes and company assets. OXIAL operates globally across multiple industries and

meets the needs of over 40 customers who have chosen OXIAL to drive business performance and achieve success.

OXIAL’s New Generation GRC solutions are entirely built to address some of the greatest challenges impacting organisations that are faced with Risk Management, Internal Control and Compliance and Audit. OXIAL’s integrated GRC platform enables organisations to become more efficient and effective in mitigating risk by integrating and automating GRC processes on a global scale.

Featuring intuitive and powerful tools that make it possible to respond to fast-evolving risk environments, OXIAL makes it easy to synchronise corporate governance, enterprise risk management and corporate compliance activities and undertake real- time monitoring across all business and IT processes and company assets. OXIAL operates globally across multiple industries and meets the needs of over 40 customers who have chosen OXIAL to drive business performance and achieve success.