The rapid pace of regulatory change is pushing businesses to embrace AI-driven solutions to remain compliant and competitive.
According to Thomas Reuters’s Regulatory Intelligence unit, over 61,000 alerts were issued by more than 1,300 regulatory bodies in 2022 alone, averaging 234 compliance updates daily. This ever-evolving landscape creates significant pressure for organisations to track, interpret, and implement regulatory updates efficiently.
Venky Verrapotu, CEO and co-founder at 4CRisk, who brings over two decades of GRC technology experience, outlines five key ways AI is transforming the regulatory change management process.
The first crucial step is horizon scanning, which involves proactively monitoring potential changes in regulations, laws, and standards across various sources. These include government publications, regulatory websites, industry news outlets, and professional associations. Traditionally, this manual process is time-consuming and prone to delays or errors. AI simplifies this by continuously scanning numerous data sources, comparing existing and proposed regulations, and generating concise summaries, he said. These AI-powered scans allow businesses to identify and react to changes up to 10 times faster, enabling teams to focus on the most pressing updates.
Following horizon scanning, organisations must conduct applicability analysis to determine whether a change affects their business. This process includes a ‘Difference Analysis’, which compares current obligations against new requirements. AI significantly speeds up this phase by parsing complex regulatory documents, flagging relevant risks, and tagging items for deeper review. AI can deliver this analysis up to 20 times faster than manual efforts, allowing compliance teams to prioritise and focus their expertise on relevant changes.
The impact assessment stage requires a deeper examination of how specific regulatory changes affect internal business processes, policies, contracts, and controls. AI enhances this assessment by mapping relationships between changes and affected business units, products, and services. It also supports legal teams by generating law memos, action plans, and compliance reports. These assessments can be completed up to 30 times faster, freeing legal experts to validate AI-generated insights rather than spending hours on initial analysis, Verrapotu explained.
Once changes are identified and assessed, businesses must implement the necessary updates while maintaining comprehensive documentation for regulatory audits. This phase often demands detailed tracking of action plans, progress monitoring, and evidence collection. AI assists by generating automated workflows, monitoring issue management systems, and comparing updated documents with prior versions to ensure compliance gaps are addressed. These automated processes can reduce management overhead by up to five times, improving transparency and audit readiness, he stated.
The final benefit of AI in regulatory change management is the competitive advantage it delivers. By accelerating every phase of the compliance process, businesses can respond to new regulations swiftly, align operations with legal obligations, and seize market opportunities faster than competitors. In a global economy where agility is critical, AI-powered compliance enables firms to adapt rapidly to new suppliers, jurisdictions, and requirements.
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