Suade and former UBS CFO discuss the Impact of AI and RegTech on financial services

AI and RegTech set to transform financial services, experts Say

In a recent webinar moderated by James Bowpitt, Global Head of Risk and Regulatory Reporting at Suade, finance experts Marcus Komm and Suraj Govindarajulu discussed the transformative impact of artificial intelligence (AI) and regulatory technology (RegTech) on the financial services industry.

AI’s role in finance

Marcus Komm, former CFO Americas at UBS, highlighted AI’s ability to streamline financial operations by reducing human error and enhancing data accuracy. Key areas of improvement include month-end close, journal approvals, and regulatory reporting. “Data traceability and accuracy have been a longstanding issue, and AI is perfectly positioned to solve that,” Komm noted.

Suraj Govindarajulu, Americas Risk and Regulation Lead at Suade, emphasised AI’s potential in risk management, particularly in fraud detection, anti-money laundering (AML), and know your customer (KYC) processes. He pointed to AI’s ability to analyse large datasets and detect patterns often missed by humans, making compliance more efficient.

Future trends in AI

Both experts predicted a significant increase in AI adoption. Komm believes early applications will focus on pattern recognition, with more advanced generative AI emerging as the technology matures. Govindarajulu stressed the importance of continued development and collaboration with regulators to ensure responsible use of AI.

Challenges and risks

While AI holds great promise, the speakers acknowledged risks such as data security breaches, intellectual property concerns, and potential job displacement. They called for strong governance, ethical guidelines, and human oversight to mitigate these risks. Transparency in AI models, especially in regulatory compliance, is crucial to fostering trust.

The way forward

AI adoption in financial services is still in its infancy, but both Komm and Govindarajulu remain optimistic. They emphasised the need for collaboration between financial institutions, technology providers, and regulators to ensure responsible AI deployment. Although specific regulations for AI have yet to be established, institutions must comply with existing governance and audit requirements.

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