A Moody’s Analytics study has delved into the adoption of AI in compliance, highlighting the enthusiasm and barriers faced by the industry.
Surveying over 550 senior compliance and risk management professionals from 67 countries, the study assessed the current usage and perspectives on AI.
The research disclosed that 83% of respondents anticipate widespread AI adoption in risk and compliance within the next one to five years. The leading areas where AI is currently applied include data analysis and interpretation (63%), risk management (53%), and fraud detection (51%).
Despite the eagerness, the study identified several obstacles hindering AI adoption. Only 14% of professionals surveyed rated their internal data quality as high, highlighting a data maturity gap. Additionally, 79% of professionals believe new legislation is crucial to regulate AI use in compliance, and 66% seek clarity on existing AI-related regulations.
Concerns regarding Large Language Models (LLMs) were also raised, with only 28% taking a positive stance and 46% having no policy on LLM adoption. Furthermore, only 26% of respondents had a high understanding of AI’s relevance to risk management and compliance.
Nonetheless, early adopters are witnessing the benefits, with 90% reporting a positive impact on risk and compliance. About 70% believe AI will bring transformative changes, with 30% actively using or trialling AI, and 49% considering its adoption.
Keith Berry, General Manager Know Your Customer Solutions at Moody’s Analytics, said, “Compliance professionals are convinced that AI will be transformative for their industry, but obstacles remain that could hinder risk management and compliance functions from capitalising on its potential.
“The benefits of AI are currently viewed in easy-to-measure quantitative terms. Process efficiencies are a good start to AI adoption, but they are only scratching the surface of the technology’s capabilities. Advanced data analytics, accurate predictions, and the scalability of data are all features compliance teams will not want to miss out on.
“With many of the professionals we spoke to expecting the widespread adoption of AI in the next one to five years, steps need to be taken for it to meet its transformative potential across risk management and compliance.
“For example, when based on high quality data, AI is able to drastically reduce the number of false positives in a KYC screening process at scale, and can result in up to 80% of level one investigation and triage happening instantly and accurately. The overall outlook for AI is strong if compliance teams acquire the right expertise and data to fully capitalise on the opportunity.”
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