Regulatory obligations require organisations to act or refrain from actions to remain compliant with the law, placing heavy demands on compliance teams who must sift through legal texts to determine exactly what requirements their firms need to meet.
According to AscentAI, however, keeping up with these obligations has become increasingly challenging as the volume and complexity of regulations grow. The process often sees teams spending hours reviewing large amounts of irrelevant information to extract what is actually required of them under the law.
AscentAI’s analysis of regulatory texts shows that only around 35% of any given regulation contains actual obligations, while the remaining 65% consists of definitions and clarifications. Identifying relevant obligations within this bulk, particularly when rules are amended, requires close attention to detail to understand how these changes affect a firm’s compliance responsibilities.
Traditionally, firms have responded to this challenge by increasing headcount and budgets to manage the growing volume and speed of regulatory updates. However, even with additional resources, human error remains a risk when individuals are tasked with reading thousands of words of regulatory text to identify obligations manually.
Recent advancements in artificial intelligence are helping to address these challenges. AI tools trained specifically on regulatory text can now automatically identify obligations within rules, significantly reducing the time and cost associated with manual reviews.
AscentAI takes this further by creating a precise obligations inventory tailored to a firm’s services. This allows the firm to examine new or updated rules in the context of its existing inventory, ensuring obligations are automatically identified and surfaced. This process focuses only on the parts of regulations relevant to the business, bypassing the majority of irrelevant content.
These obligations are presented in a clear and actionable manner, allowing compliance teams to map them directly to internal risk areas and business topics, including AML, consumer credit, and cybersecurity.
The automation of obligation identification eliminates the hours and financial resources spent on manual reviews while delivering immediate clarity on what actions a firm needs to take to remain compliant. Because these AI tools are purpose-built for financial regulatory compliance, they offer high accuracy while minimising the risk of oversight.
Ultimately, effective compliance begins with an accurate, continually updated obligations inventory. By automating the extraction of obligations specific to a business, firms can establish a scalable, enterprise-wide source of regulatory truth, improving compliance accuracy and reducing risk.
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