Banks Are Leveraging AI to Tamp Down Compliance Violations

Banks and credit unions were one of the first sectors to bring artificial intelligence aboard and in various ways.

Now, they’re getting more creative.

Japan-based Mizuho, for example, has made available Microsoft generative AI tools to its 45,000 employee base.

According to Bloomberg, Mizuho “is bullish” on Gen AI’s ability to disrupt workflows and processes in all of its operations. Banking executives say the idea is to enable staffers to “experiment” with different ways to test out Gen AI applications to ease their workloads and make their work day more efficient.

“This is something we have to do, otherwise we get left behind,” said Toshitake Ushiwatari, general manager at the banking giant (it’s the third-largest bank in Japan.)

Staffers seem to love the Gen AI concept and its use cases.

“It’s like poking a beehive,” Ushiwatari said, speaking on the feedback he’s getting from bank employees. “They think it will completely re-set the world, triggering disruptive innovation.”

One area where Gen AI use is especially pervasive is in internal compliance.

For instance, Mizuho is using AI models “to analyze volumes of data and use it to generate new images, texts, audio, and video — as a one-stop reference point for the bank’s vast trove of internal rules, processes, and other manuals,” Bloomberg reports.

Time For a Change

Internal compliance is a company area that’s ripe for innovation, and AI is there to provide it, experts say.

“Financial institutions are grappling with their level of preparedness for regulatory audits and fines for communication non-compliance,” says John Rarrick, head of marketing at Movius, a mobile communications software provider. “Regulatory scrutiny on communication channels like voice calls, emails, texts, or messaging apps like WhatsApp has resulted in hundreds of millions of dollars in fines, making compliance a top priority.”

The key to improving the compliance channel is adopting a comprehensive platform that supports multiple communication channels and helps these institutions avoid compliance issues, Rarick says. “With AI-enabled monitoring and recording solutions tailored for these heavily regulated markets,” he says, “organizations can remain compliant with changing regulation, avoid risks associated with non-compliance, and save time, reputational damage, and financial consequences.”

AI-based solutions allow document-heavy banks and financial institutions to gather and analyze communications data.

“That provides actionable insights and recommendations to help financial institutions stay above-board and achieve their personalized business objectives,” Rarick notes. “They monitor for fraud, insider trading, market manipulation, and other forms of misconduct, bringing hidden communications to the surface in real-time to ensure ongoing compliance.”

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