Simplifying Compliance: The Role of AI and RegTech

The Financial Regulation Innovation Lab (FRIL) is dedicated to simplifying compliance through emerging technologies, with Artificial Intelligence (AI) representing the latest evolution in regulatory technology (RegTech). Building on previous research and industry engagement—including workshops, blogs, webinars, and a micro-credential course—this White Paper presents key considerations for the conceptualisation, design, and implementation of AI-driven compliance systems.

We begin by examining the nature of regulatory rules and the compliance process before exploring the complexities that challenge AI deployment. The discussion then shifts to Generative AI (GenAI) as a cutting-edge innovation, analysing its capabilities and relevance to compliance functions.

A focused use case on GenAI in robo-advisory services illustrates AI’s potential in asset management, where conventional AI is already well-established. Finally, we consider the broader organisational implications of AI adoption, emphasising the opportunity to view compliance as an embedded and adaptive function able to evolve and respond to changing stakeholder expectations and regulatory frameworks.