The first step in managing your regulatory lifecycle
The regulatory lifecycle includes the processes and procedures that keep your organization compliant, including keeping up with new and updated rules, identifying your obligations under those rules, filtering any change through your organization, and the ability to defend your compliance posture.
Components of your regulatory lifecycle include:
In financial services, the process of identifying relevant regulations is the first step in controlling your regulatory lifecycle. However, due to the sheer volume and velocity of financial regulatory change, it is also a huge challenge and potential source of risk.
Faulty foundation = susceptibility to risk
On average, U.S. firms are subject to a handful of regulators (significantly more if they operate globally), and each regulator has hundreds to thousands of pages of regulation that they maintain, update, and enforce.
Today, risk and compliance teams must gather information from:
- International, national, state, and local legislative actions
- Court decisions
- Executive actions (regulations, guidelines, and enforcement)
- Other supporting legal materials
And yet, many firms try to manage and synthesize this influx of information in the traditional manner—via manual review.
Manual solutions only plug the cracks in the foundation
Once compliance teams have compiled material from regulators, analysts then assess the documents to extract the rules that apply to your business and the specific obligations those rules contain.\Only after hundreds of hours of work can analysts can present the inventory of your firm’s obligations for approval.
Only then are your teams able to begin the real work of compliance—reconciling obligations with policies and procedures, creating controls, and implementing compliance throughout the business.
However, in our current regulatory climate, this process becomes increasingly impractical. The pace of regulatory change and the cost of compliance haven’t slowed down. At the same time, neither has the cost of non-compliance. The Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) reported a record $25.3 billion in combined enforcement actions in 2024, including both fines and monetary relief.
For financial firms, missing the finest detail within a body of regulation or rule amendment can be disastrous. This makes manual processes especially risky. Like the proverbial needle in the haystack, any obligation missed among the thousands of lines of regulatory information can have severe consequences at audit time.
Automation restores the framework from the ground up
Artificial intelligence purpose-built for financial regulatory compliance radically streamlines and simplifies the traditionally manual process of developing and maintaining your regulatory obligations inventory. A blend of technologies including machine learning (ML), natural language processing (NLP), and Generative AI (GenAI)—combined with human oversight—can complete in mere minutes work that used to take hundreds of hours, and it does so at a fraction of the cost, and with greater accuracy than ever before.
- ML is the capability to “train” systems how to complete a task. Once NLP has translated regulatory text into something that can be read by a machine, trained ML systems can extract the rules and requirements from that dense text.
- NLP is the combination of computer science and linguistics that allows computers to understand human language. In essence, NLP takes the dense texts of regulatory documents and “translates” them into machine-readable language.
- GenAI summarizes each regulatory update, helping users quickly ascertain and understand what’s new.
- Human oversight is used to verify all regulatory data with compliance experts to ensure accuracy.
These elements are the heart of AscentAI, a true innovator in regulatory technology that automates the full regulatory lifecycle:
AscentAI:
- Processes thousands of pages of regulatory documents in minutes
- Unearths specific obligations within those documents
- Isolates the obligations that apply to your business
- Integrates those obligations with policies and controls via integration with leading GRC tools
No more hours of manually poring over regulatory text, no more spreadsheets, no more siloes. AscentAI automates the provision of an accurate, continually updated source of regulatory truth for the whole enterprise. The first step in managing your regulatory lifecycle is automating it.
Interested in learning more? Contact us.
