Artificial Intelligence (AI) has been a game changer for businesses, offering a wide range of opportunities to drive improvements to processes and increase efficiency. From automating tasks that reduce manual work to enhancing security measures, AI is also playing an important role in supporting compliance activities in regulated digital industries.
Meeting regulatory compliance requirements involves an extensive set of processes and policy frameworks. Before the availability of AI for supporting compliance, there was a huge amount of manual work involved in preparing evidence to provide to regulators.
Now AI has redefined this area of responsibility, helping businesses to avoid financial penalties and minimize the manual work needed to stay compliant.
Here are some of the key ways AI is enhancing compliance processes in regulated digital industries:
Anti-Money Laundering Monitoring
Many digital industries have to meet Anti-Money Laundering (AML) regulations to prevent criminals from hiding illicit funds. AI is being used by businesses to monitor suspicious activity, including real-time monitoring of transactions that appear to be unusual.
The Know Your Customer (KYC) regulations in the US, Canada and many other countries are another key area of compliance that AI is supporting. AI tech is used to verify documents such as passports and AI tech can perform facial recognition checks to ensure that the document matches the identity of the person when they get set up with a bank or when accessing online casinos in Canada.
Proactive Compliance Monitoring
Before AI was introduced into compliance activities there was a more reactive approach to dealing with breaches. AI has allowed organizations to introduce proactive monitoring of risks, such as identifying unusual patterns or user behavior that does not match the user profile.
Companies can prevent breaches from taking place by identifying suspicious activity in advance and blocking potential incidents. Proactive compliance monitoring is common in digital banking, fintech and also online gambling.
The criteria for issuing a license for an online casino includes strict requirements for security measures to protect users’ financial transactions and personal information. Another aspect of compliance that online casinos must adhere to is responsible gambling regulations.
Online casino operators have been able to leverage AI to introduce new measures to comply with responsible gambling requirements, such as sending automated messages to users to remind them of how long their session time has been and suggesting taking a break. AI tools are also available for users to manage their gambling activity and stick to preset limits, such as a maximum deposit per day or applying a limit on session lengths.
Monitoring Regulatory Changes
In addition to supporting and enhancing the internal compliance processes, businesses can use AI to keep a close eye on regulatory changes that are introduced into the sector. When regulatory bodies bring in updates, this can be announced using papers that have hundreds of pages. AI can scan the documents for key changes that impact their specific industry and create a summary for the compliance team so they can quickly understand what the impact of the changes will mean for the business.
Through this process, the compliance team will be able to move faster to align their processes to account for any regulatory changes, reducing the chance of non-compliance.
Producing Compliance Reports
One of the most time consuming compliance activities in regulated industries used to be pulling together reports to provide evidence to the regulators. With AI, reports can be automatically generated, which include all the required data needed to prove compliance.
As this work is done by AI, there is also less possibility that a manual error will be made in the reporting processes. Companies can instantly run reports for suspicious activity, risk exposure and financial transactions. They can also use automated reporting for internal compliance auditing to speed this process up and ensure it is accurate.
Historically, compliance reports were generated on a periodic basis but now companies have access to this data on a real-time basis, allowing closer monitoring of their compliance activities.
Compliance Training for Employees
Businesses in regulated digital industries are required to ensure that relevant employees receive compliance training, including data protection and Anti-Money Laundering training. AI tools are often used to develop content for training courses, using regulatory guidelines as a basis for knowledge building. Training progress and results are captured and AI can generate reports so that training teams and compliance teams can identify if there are any weaknesses that need to be addressed.
AI has revolutionized the digital landscape and while it has brought problems in terms of cyber criminals using AI to develop sophisticated scams, the benefits it is delivering across compliance activities continue to grow.
