AI serving compliance and risk management (incl. fraud and anomaly detection)
Companies today have to deal with increasingly stringent regulations and increasing risks. Whether it is financial institutions having to comply with anti-money laundering regulations or pharmaceutical companies having to meet strict safety standards, the need to comply with all kinds of regulations is high.
At the same time, companies face a variety of risks that threaten their operational continuity, such as cyber-attacks and fraud.
Fortunately, AI offers solace.
Traditional compliance and risk management methods - which rely heavily on manual processes and periodic audits - are often no longer sufficient to effectively address these challenges.
AI can automate and optimise these processes by analysing large amounts of data, identifying patterns and automatically flagging anomalies that indicate potential risks or non-compliance with regulations.
Checking compliance
In terms of compliance, AI can be deployed to automatically scan and check large volumes of documents - such as contracts, reports and policies - for regulatory compliance.
Machine learning can be used to recognise specific rules and regulations and immediately flag discrepancies or potential non-compliance for further investigation.
For example, a bank can use AI to automatically analyse credit files and check their compliance with the latest anti-money laundering regulations. Any discrepancies are immediately reported to the compliance department.
Detecting risks
Predictive AI analytics, in turn, can detect potential risks before they occur. By analysing previous data and recognising patterns, AI can predict where and when risks may arise. These could be financial risks, but also market volatilities or operational risks such as supply chain failures.
Real-time monitoring is a very powerful AI application in risk management. AI systems can continuously monitor transactions and activities to identify suspicious patterns that may indicate fraud, identity theft or unauthorised access to systems.
AI can also be used to automate risk reporting and compliance activities. This includes generating detailed reports that meet regulatory requirements, as well as automating internal audits and controls.