Growth of RegTech and AI in Financial Services

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Growth of RegTech and AI in Financial Services

CFO Tech Outlook | Wednesday, June 09, 2021

To stay compliant and manage the risks associated with fast-shifting legislation across the various jurisdictions in which a company works, Robotic Process Automation (RPA) and AI solutions may be both helpful and necessary.

FREMONT, CA: The integration of Artificial Intelligence (AI) to boost various business processes, such as compliance, is at the heart of a significant number of organizational technology plans. Firms must maximize both the value and operational effectiveness of their compliance programs in today's environment to save costs while meeting all applicable regulatory obligations. The efficiency and effectiveness of current compliance processes can be considerably improved by combining RegTech technologies such as AI with cloud-based platforms.

Compliance and regulations, like technical advancements in the financial services business, are regularly reviewed and appealed. Compliance departments need a thorough understanding of regulations and how they affect all business lines within an organization to comply with them as they are implemented properly. To stay compliant and manage the risks associated with fast-shifting legislation across the various jurisdictions in which a company works, Robotic Process Automation (RPA) and AI solutions may be both helpful and necessary. The understanding and adoption of new regulations as they are implemented is one example of how AI integration can help improve compliance operations.

The use of AI in RegTech can also be found in the Anti-Money Laundering (AML) and sanctions fields. RegTech solutions are typically adopted to boost efficiency and lower costs. However, when it comes to anti-money laundering and sanctions compliance, banks face financial risk and reputational, regulatory, and legal risks. The AI application can find patterns and correlations in massive datasets that a human would not be able to in AML and sanctions-related compliance activities.

Through consistent, long-term use, AI might learn and improve pattern detection, resulting in increased efficiency and accuracy. Furthermore, these new technologies have enabled the reduction, if not complete elimination, of humans from the financial counseling process. Financial professionals and their clients can utilize these technologies, often known as robo advisers, for digital investment advice, including the automation of generating investor profiles, creating proposals, and generating an optimum asset allocation.

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