How Technology and Trends are Improving the Future of Compliance

As participants in the RegTech industry, we at SILO like to stay up to date with IT developments and trends. We are often drawn to articles and technology reports on AI (artificial intelligence).

AI is receiving a lot of attention as it claims to reach new highs (and some lows) in development. Some welcome it, some fear it. Goliaths of the tech industry like Facebook, Google and Amazon invest in it – knowing that the more a new technology can personalise your experience on their platforms, the more advertising revenue they can generate from advertising aimed specifically at you.

One recent article has even suggested that AI technology might replace AML compliance professionals – an alarmist view which could leave many in the compliance industry wondering if their career prospects are more limited than they had hoped.

We think not. In fact, for several reasons we believe that advances in technology will only increase career possibilities within the compliance industry.

First, compliance simply isn’t about customising online experiences to increase revenue. The key function of the AML compliance officer is to meet regulatory requirements AND keep compliance costs down. Until AI can adequately document due diligence to meet regulatory requirements,  the compliance officer’s role is safe.

Second, although larger financial institutions may benefit from AI technology for transaction monitoring – eliminating manual, time consuming review to spot money laundering – the smaller, non-bank regulated businesses are still unable to invest in these as yet unproven technologies for spotting money laundering in their unstructured data. The cost to do so is simply too high.

Third, although AML compliance officers will need to rely on more technology, reliance on technology does not equate to being replaced by technology. Put rather grimly, regulators will require someone in the business to be held responsible. Why? Because you can’t send AI to prison. No business will ever be able to hide behind the excuse, “Oops, sorry about helping to launder that money – we didn’t have the settings on our system right.”

Fourth, compliance is as much an art as a science. There is no algorithm on earth which can replace instinct that a client may be lying to you even when all their documentation lines up.

For these reasons, the future of the compliance professional is not dire. In fact, the opposite. Future compliance professionals will have to be skilled not just in regulation, but also in technology – providing those in compliance roles with wonderful and exciting opportunities, much more significant career prospects, and even a growing professional status within the business itself.

Challenges remain, however, for AML regulated businesses. They must find the right, proven technology to fit their needs and budget AND find the skilled compliance professionals to understand and manage that technology.

Existing, proven technologies are already making compliance work flows much more efficient, reporting easier and are helping to reduce compliance overhead costs. So one thing is certain – the role and function of the compliance officer is bigger today than it ever was – and the compliance officer of the future is you and me.

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