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Compliance technology changing the face of compliance

Editorial Team

New compliance technology such as AI and intelligent tagging has the power to change compliance. Our webinar which brought together in-house experts and external subject matter specialists has shed light on the latest cutting-edge technologies and how they can help solve the many day-to-day challenges faced by compliance professionals across the globe.

  1. Our, which is available on demand, looks at the ways that technologies such as AI machine learning are helping to change compliance.
  2. New compliance technology is potentially game changing for screening customers and third parties in order to #FightFinancialCrime.
  3. The success of technology in augmenting human ability is dependent on individuals not simply following machine recommendations.

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In today’s rapidly changing regulatory landscape, it is critically important for banks and financial institutions to respond to new regulations with agility, while ensuring that the customer experience does not suffer.

These dual demands put pressure on compliance departments.

Compliance technology in the form of end-to-end controls capable of mitigating a multitude of financial crime risks can help to alleviate this pressure.

The webinar also considered some of the issues thrown up by innovation. One of the panelists, Reetu Khosla, Global Head of Client Lifecycle Management & KYC, Pegasystems Inc, cautioned that the industry is facing a “technology apocalypse.”

She stressed that transparency and control were of the utmost importance, commenting that “robotics without control equals robot.”

The technologies helping to change compliance. Reetu Khosla quote

The biggest compliance worries

A live webinar audience poll conducted during the panel discussion revealed that compliance professionals are concerned about a range of issues.

Risk of regulatory breaches’ was selected by 34.5 percent of respondents, followed by ‘information overload and lack of resources’, selected by 26 percent.

Other concerns included ‘fear of missing important information’ (24 percent) and ‘managing the compliance risk with the impact on the customer’ (15.5 percent).

These concerns are further exacerbated by routine day-to-day challenges.

For example, when screening customers or third parties, compliance professionals often encounter issues that add to the complexity, cost and time-consuming nature of the screening process.

Two examples include:

  • Ambiguity — where one word has different meanings — which can lead to false positives. Costly human review is needed to root these out.
  • Variety within languages, where meaning can be expressed in different ways through synonyms and paraphrases. This can lead to false negatives, which are more dangerous than false positives from a compliance point of view.

New compliance technology

New compliance technology offerings are seeking to extract maximum value from data, aid decision making and ease these and other burdens on compliance professionals.

Mike Moreno, Senior Product and Content Manager, World-Check One — Media Check, said that many key challenges can be solved by applying the latest technologies, such as in the following examples:

  • AI machine learning can identify entities and the relevancy to content themes. This reduces false positives and enhances content results, so that they become more targeted.
  • Intelligent tagging has the ability to enable document-level classification and structure content. Millions of text documents can be processed and people, places, facts and events can be tagged with scores to indicate relative importance.
  • New capabilities eliminate article duplication, allowing users to focus on unique events rather than trawling through different versions of the same story.
  • Content can be grouped into events using text analytics. The functionality identifies and clusters similar articles related to an event/theme and the related entity name.

How will technology change compliance?

Looking ahead, Dr. Jochen Leidner, Director of Research, says that by 2020 he expects broader availability of conversational agents — in other words it will be increasingly feasible to talk to machines.

He also predicts that computers will support the task of assessing the credibility of content, which is particularly important in light of recent fake news scandals.

Further expected developments in compliance technology include advanced automatic detection of risk types, exposure and estimated impact, all of which should improve dramatically over the next few years.

We should also expect better end-user tools that will increase speed and lower costs within compliance departments.

Discover how World-Check One supports our clients’ due diligence needs in the fight against financial crime, bribery, and corruption

The changing role of compliance

A further online poll conducted during the webinar revealed that 74 percent of those who participated believe that the latest technologies can indeed be game-changing for compliance, but how will they affect the role of the compliance professional?

The technologies helping to change compliance. Poll result

The consensus view is that day-to-day, repetitive tasks will become automated, freeing professionals to concentrate on areas of higher value-add, such as deep analytical work.

The end result will be that compliance roles will become more strategic in nature.

Will machines replace humans?

Harnessing the power of new technologies can solve many current challenges, reduce costs and ultimately change compliance.

Machines will not replace humans, they will rather allow them to become more efficient and achieve more.

But Leidner warns that this augmentation of human ability can only be achieved “if individuals remain cognitively active and do not simply follow machine recommendations, slipping into autopilot mode”.

A webinar recording is now available on demand:

World-Check One’s Media Check – the next generation in media screening for compliance professionals