Regulatory compliance through RegTech and AI (artificial intelligence)

Seline Trachsel
Senior Manager, Data & Analytics

'Compliance with all relevant regulations in the area of data protection' is one requirement frequently passed on to customers and partner companies. But what actually are the relevant regulations? And how can I be sure that there haven’t been any changes to the regulatory requirements since they were last checked? This article focuses on these challenges.

The regulatory environment is becoming increasingly difficult to navigate. Every day, new regulations are passed and existing ones updated – by different authorities in various countries, and also by transnational bodies. The challenge for companies, therefore, is to identify which regulations apply to them, especially if they supply a diverse range of products in different countries. Measures for ensuring compliance with regulatory requirements are complex and expensive for companies, but often still can’t guarantee with sufficient certainty that nothing has been overlooked.

Artificial intelligence (AI) as a possible solution

Regulatory compliance is a good example of how AI can provide us with efficient support. That’s because it’s a matter of figuring out, from these infinitely large quantities of data on regulatory texts, which of them are relevant for a particular issue. The AI discipline used for this is known as natural language processing (NLP). Using NLP, the texts can be translated automatically to a large extent, and then checked for similarity and categorised. This means that texts with similar content can be grouped together or even examined in a more targeted manner for differences.

'Artificial intelligence lets us search and analyse regulations clearly and compare them with the company’s internal directives. That helps us ensure compliance with all relevant regulations in the area of data protection.'

Matthias Leybold, Partner, Lead Data & Analytics, PwC Switzerland

Partnerships with RegTech

PwC recently entered into a joint business relationship with the RegTech company CUBE. CUBE boasts one of the world’s most complete sources of regulatory requirements in the area of financial services, comprising regulatory data from 180 jurisdictions, which it processes using NLP (natural language processing). CUBE offers a platform in which the regulations can be clearly searched, analysed and compared with a company’s internal directives. This enables us to carry out an in-depth analysis of the implications of regulatory amendments and risks for companies.

More information

Read more about our rapid, technology-based assessment process and the partnership between CUBE and PwC Switzerland.

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