IDEAS home Printed from https://ideas.repec.org/a/aza/jfc000/y2019v3i1p44-59.html
   My bibliography  Save this article

Artificial intelligence for regulatory compliance: Are we there yet?

Author

Listed:
  • Butler, Tom

    (Department of Business Information Systems, University College Cork, Cork City, Ireland)

  • O’Brien, Leona

Abstract

The world’s first digital computer, Electronic Numerical Integrator and Computer (ENIAC), would have turned 73 this year. Since ENIAC’s birth in 1946, we have used computers to create a digital version of our analogue world. Human intelligence (and natural stupidity) evolved for the analogue world; however, human cognitive capabilities are limited when it comes to the complexity of understanding and decision-making in the digital world. This paper explores the capability of artificial intelligence (AI) to transform the financial industry. Banks and insurance companies have effectively digitised their businesses, with financial institutions reportedly spending more than any others on data; however, they find themselves caught between the Scylla of big regulation and the Charybdis of big data, particularly where financial compliance and risk management is concerned. Supervisory authorities are equally challenged. It is no surprise, then, to discover that AI is shaping the FinTech, RegTech and SupTech landscapes, in addition to related activities in the legal and professional services sectors. In the face of unbridled enthusiasm and unquestioning acceptance of many of the claims made for AI, this paper takes a balanced, critical stance in explaining the what, why and how of AI in the financial industry, with a particular focus on the art of the possible in regulatory compliance.

Suggested Citation

  • Butler, Tom & O’Brien, Leona, 2019. "Artificial intelligence for regulatory compliance: Are we there yet?," Journal of Financial Compliance, Henry Stewart Publications, vol. 3(1), pages 44-59, September.
    • Handle: RePEc:aza:jfc000:y:2019:v:3:i:1:p:44-59
    as

    Download full text from publisher

    File URL: https://hstalks.com/article/5196/download/
    Download Restriction: Requires a paid subscription for full access.
    File URL: https://hstalks.com/article/5196/
    Download Restriction: Requires a paid subscription for full access.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    artificial intelligence (AI); regulatory compliance; digital technologies; semantic technologies; RegTech; SupTech; finance; financial regulators;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • K2 - Law and Economics - - Regulation and Business Law

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aza:jfc000:y:2019:v:3:i:1:p:44-59. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Henry Stewart Talks (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.