The Impact of Artificial Intelligence on Financial Regulation and Compliance

Abstract

Artificial Intelligence (AI) has become a transformative force in the financial industry, significantly impacting regulation and compliance. By leveraging advanced algorithms and machine learning techniques, AI can process vast amounts of financial data in real-time, enhancing the efficiency and accuracy of regulatory compliance. Financial institutions use AI to detect fraudulent activities, manage risk, and ensure adherence to complex regulatory frameworks. Despite the numerous benefits, AI also presents challenges, including concerns about transparency, fairness, and the potential for systemic risks. This paper explores the impact of AI on financial regulation and compliance, highlighting both the opportunities and challenges it presents. It examines how AI is reshaping the regulatory landscape, improving compliance processes, and the ethical and practical considerations that need to be addressed.