It can be hard for businesses to keep up with regulation and compliance. It is not a particularly glamorous area of any business, but it is, nonetheless, essential. Richard Robinson, CEO at Robin AI, highlights the importance of regulation and what can happen if you do not keep up with it. He believes AI can make a huge difference in this area to help businesses remain compliant.
No matter the size or sector of a business, keeping up with regulation and compliance can cause headaches.
The ever-changing nature of regulation is under the microscope as the Trump administration takes office in the US, signalling that it will undo much of the regulation put in place under President Joe Biden. Even reducing regulation in this fashion requires legal and compliance teams to rapidly adapt and change course.
Whether it’s a case of reacting to new laws at home, keeping up-to-date with EU or global frameworks or meeting industry standards, every organisation risks sucking up huge amounts of time and making costly errors.
A fractured landscape
Many of the challenges presented by compliance come as a result of its fragmented nature – whether at the governmental scale, or within individual organisations.
Incremental change over time can mean that policies and contracts are scattered across different systems, departments or even languages. This can be particularly challenging when new staff join and need to pick up the thread.
New frontiers are constantly emerging too. Many countries now place a higher priority on measuring the environmental, social and governance (ESG) impacts of a business, adding to an already vast array of demands on legal and compliance teams.
Emerging technology will present challenges: from the merging of technology and finance and the growth of blockchain and cryptocurrencies, to monitoring and responding to laws around AI.
Paying the price
The consequences of not keeping up with regulation can be severe, including heavy fines, lawsuits and reputational damage.
In the UK, companies that breach GDPR regulations have faced penalties of tens of millions of pounds. Businesses in the EU have faced even bigger fines for non-compliance, while new laws have been passed that mean those breaking environmental laws could face fines and imprisonment. Beyond financial losses, damage to customer, investor and stakeholder trust can be harder to quantify but no less impactful.
While it’s easy for businesses to view regulation as a threat or an obstacle, it’s important to recognise the value it brings. Regulation protects businesses from unethical practices, creates a level playing field and instils consumer confidence. For industries like healthcare and financial services, proper regulation is key to building and maintaining trust.
So the problem isn’t regulation itself, but how can you keep regulatory drains on resources under control? How to reduce the time and money required to sift through vast amounts of documents, contracts, policies and service agreements and the complexity of keeping them updated.
An AI for detail
With the sheer scale of the task in mind, modernising compliance processes and applying new technology is a must. With its increasingly developed analysis and reasoning capabilities, AI should play a key role in lightening the load.
For example, natural language processing (NLP) algorithms can identify non-standard clauses, flag regulatory conflicts and suggest updates to contracts. AI has also been found to produce fewer errors than humans when being applied to identify obligations and risks, providing clean, intelligible analysis and spotting patterns for staff to assess and apply to their practice.
AI can’t solve every issue a business is facing when it comes to regulation, but AI can certainly help speed up many of these extremely time-consuming processes. Ultimately, this can help to free up in-house legal and compliance teams to apply their knowledge to higher level analysis or even shaping future regulation, instead of manually wading through documents just to keep their heads above water.
Responding to change
AI also offers ways to pivot in close to real time – by continuously monitoring for regulatory changes and translating them into clear tasks. This proactive approach ensures businesses remain compliant while minimising the risk of fines or penalties. Nowadays, companies can even demonstrate compliance with new regulations like the EU’s Digital Operations Resilience Act (DORA) using AI. Tools like Robin Reports can generate plain language reports on thousands of documents, to demonstrate compliance.
But these tools don’t just react to changes; they can anticipate them too. AI can analyse historical data, industry trends and regulatory patterns to identify compliance risks and vulnerabilities. These tools can generate automated reports, providing employees with valuable insights to help companies prepare effectively for future change.
Keeping humans at the centre
While AI can handle the heavy lifting of data analysis and document review, human judgment remains crucial for nuanced decision-making. Workflows should be planned so that AI supports and enhances the work of skilled compliance professionals.
A practical example here is using AI to develop customised compliance training materials – based on insights AI derives from your organisation’s data and the relevant regulations. This can be particularly valuable for global teams where language barriers come into play. AI can generate tailored training materials in multiple languages, ensuring that all employees are equipped to meet regulatory standards, regardless of location.
Facing the future
As regulations continue to evolve, the tools and strategies businesses use to stay compliant must do the same.
As governments pull in different directions on regulation, this complexity of these challenges is set to increase. Avoiding costly slip-ups makes investing in new solutions not just a matter of convenience – but a necessity.
By embracing AI, businesses can turn compliance from a daunting obligation into a strategic advantage. After all, if you can’t change the rulebook, the answer is to start working smarter within its pages.
