ChatGPT has had the most amazing growth and user adoption rates of all time. Many tech leaders agree that this platform innovation is likely going to have a bigger impact than the internet and mobile phones combined, in particular, because it offers to accelerate and simplify many processes and eliminate a lot of semi-manual jobs in the very near future.

Which compliance and risk activities can be easily replaced by AI:

• Writing policies and keeping policies up-to-date,
• Summarizing regulations and changes thereto,
• Writing up customer profiles,
• Writing up monthly, quarterly and annual reports,
• Documenting decisions, writing agendas and meeting notes, 
• Customer onboarding, review of the documents, checking the consistency of the documents,
• Risk scoring of customers and transactions,
• Fraud prevention, creating and optimizing rules around transaction monitoring, elimination of redundant and false positive alerts,
• Creation of suspicious activity submissions and other standard reports.

I’m personally welcoming these changes because it can only mean that humans will become more productive and work will be more efficient and new types of activities or business models will be created. I mean, it is highly likely that the internet created and keeps creating more jobs than the number of jobs it eliminated, right?

What types of compliance activities will be likely to continue being done by humans? My guess is everything to do with complex decision-making, for example, human interactions in relation to decisions around new projects or new initiatives, analyzing failures and incidents, hiring, firing, and managing teams, solving conflicts, and defining priorities.

Essentially, humans are needed where we need complex judgment. 

I have shared with you before that Compliance That Makes Sense consists of three pillars:

• knowing laws and regulations and converting those into actionable policies and procedures,
• building efficient processes using technology, and
• pragmatic risk acceptance.

Without having reasonable policies and procedures in place, your entity may experience fast growth, but it is going to be a wild and undocumented growth (this is the situation of Binance, which is evidently catching up with them).

Without pragmatic risk acceptance, overly conservative and inflexible policies and processes will end up recreating traditional banking.

Without efficient and verifiable processes, unbalanced risk-taking combined with empty policies that nobody follows will likely produce massive window dressing, abuse, and fraud (thinking of FTX and Wirecard).

Risk-taking, complex judgment, and the ability to collaborate with colleagues are hard to replace, which is why I would say that building and expanding skills in these areas are going to be more valuable.

What is your take on compliance automation and the future of AI-powered compliance?

Cheers!

Don’t miss this fresh episode on Compliance That Make Sense podcast today! Tap this link to start listening! 🎧