Leveraging AI for Compliance Management

While artificial intelligence (AI) has already transformed many different sectors, compliance management is not the first one that comes to mind. However, thanks to this technology’s ability to process large amounts of data in a short time, AI for compliance management is not just an idea but actually a solution that’s already in place (at least, to some extent). Read on to see how AI can improve compliance management in your company.

For the needs of this post, we understand compliance management as the process of ensuring that your company/organization operates in line with all the required regulations, laws, and standards. Typical compliance management requires a lot of manual work and time. Thanks to AI machine learning, those compliance management programs are now much more effective. How so?

Will AI transform compliance management?

To some extent, this is already happening! Here, there is one AI and ML feature that’s especially important – the ability to process gigabytes of data at speeds that are unimaginable to human employees.

You can use AI to process all the relevant documents to find information and patterns in data that can affect your compliance with specific legal and industry documents. This refers to [1]:

• Detection of risk, audit, and control deficiencies
• Detection of duplicate risks and controls
• Detection of patterns in data
• Reduction of false positives

However, while this technology brings about fantastic opportunities (primarily when it comes to saving time and resources), there are also some roadblocks and challenges that need to be addressed in order to implement this technology in a fully effective and safe manner.

AI for compliance management: Opportunities

Time and money savings

First off, AI and machine learning can significantly reduce the time and costs involved with compliance management. The traditional process is not only time-consuming but also prone to human error (it’s easy to omit something important in a 100-page document). AI, together with ML, can not only speed up this process and automate it; it can also minimize the risk of errors.

More accurate process

AI and machine learning are very good at uncovering hidden patterns in data. As a result, these technologies can be used to verify compliance on a completely new level that’s not always apparent at first sight. For instance, AI-powered tools can verify your compliance by looking for unusual patterns in your company’s financial data, e.g., to ensure there are no money-laundering practices going on (or any other type of fraudulent activities).

AI for compliance management: Risks

Potential bias

While AI was designed to be completely bias-free, that’s not always the case. If the data you use to train your algorithms/compliance programs is already biased, the algorithm that’s trained on this data will also be biased in the same way. This is especially crucial in compliance management, as companies that want to be compliant with regulatory standards shouldn’t be found biased in any way [2].

Lack of human judgment

AI can be of great help when it comes to compliance management. But it cannot replace your human compliance team altogether. At the end of the day, it’s your compliance team’s decision to implement or discard some of the findings or suggestions provided by AI.

Building effective compliance programs with AI

If you’re thinking about implementing a new compliance program that’s backed up with AI, consider following these steps:

Find the right technology

There are dozens of AI-powered tools out there, and sometimes, you’ll need to build one from scratch to achieve the best results. Usually, it’s best to work with a trusted AI consulting company that will be able to provide you with the necessary tools and know-how.

Use high-quality data

If you want your AI for compliance management to be effective, you must ensure it’s trained on high-quality, unbiased data. Only this way will you be able to avoid potential bias and other data-related issues.

Implement AI into your compliance programs

Once everything is set and ready to go, you must integrate your AI tool with your existing compliance procedures or program. As we’ve already mentioned – don’t treat AI as a replacement for your employees; AI is only a tool that makes the work more effective, but you still need human judgment and experience to make informed decisions.

Protecting sensitive data: AI strategies for compliance

There is one more thing that needs to be addressed – protecting sensitive data. Your AI compliance tool will require access to all available data, including the sensitive or confidential one. This requires some additional data privacy procedures tailored to your company’s needs; in order to ensure the sensitive data is handled properly not only by your algorithm but also by other employees in your company [3].

Read more: Privacy Concerns in AI-Driven Document Analysis: How to manage confidentiality?

Here’s an example – you can train your compliance programs to verify in real time how sensitive data is stored and used in your company. Your findings may trigger you to implement some new data-handling standards in your organization or to organize a workshop for your employees so that they know how to deal with such information. Additionally, your compliance programs can automatically notify your compliance or data privacy officers about any unauthorized access or breaches.

Sustainable AI deployment: Embedding compliance principles

One last thing we want to discuss is sustainability. To ensure your compliance program is not only effective but also sustainable, you should think about embedding compliance principles into the program’s deployment and daily functioning. Make sustainability the integral part of the development process, not just an afterthought. This way, you will be able to steer everything in the right direction from day one, instead of making last-minute changes to the algorithm.

Things that are especially important here comprise the following elements:

• Close cooperation with compliance officers to ensure your AI/ML algorithm checks all the right boxes
• Listing and addressing all the relevant compliance risks even before the first line of code is written
• Continuous monitoring of how your compliance program is working (along with necessary corrections and adjustments)

Lastly, your organization should also pay extra attention to ensuring full transparency of how your AI compliance tool is used. You can do so by implementing explainable artificial intelligence (XAI) methods that give an understanding of the decision-making process of AI in your models [4].

Transparency includes implementing an auditing mechanism that blocks AI recommendations from being implemented automatically. This way, you can ensure your company’s AI for compliance management is not just effective but also ethical, compliant, and sustainable.

References

[1] Thomson Reuters, Where AI will play an important role in governance, risk & compliance programs, https://www.thomsonreuters.com/en-us/posts/corporates/ai-governance-risk-compliance-programs/, accessed on August 13, 2024.

[2] ActiveMind.Legal, Bias in artificial intelligence: risks and solutions, https://www.activemind.legal/guides/bias-ai/, accessed on August 13, 2024.

[3] Medium.com, Safeguarding Sensitive Data: AI-Based Security and Compliance in Regulated Industries, https://medium.com/@wanywheresolution/safeguarding-sensitive-data-ai-based-security-and-compliance-in-regulated-industries-eab25d2b17f1, accessed on August 14, 2024.

[4] LinkedIn, Ensuring Regulatory Compliance with AI, https://www.linkedin.com/pulse/ensuring-regulatory-compliance-ai-auxiliobits-bbjse/, accessed on August 14, 2024.