By FintTech Global
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As AI reshapes financial services, compliance is moving beyond interpreting rules and managing controls. The challenge is increasingly one of engineering: translating regulatory obligations into systems that can adapt, act and demonstrate accountability.
Compliance has traditionally relied on people interpreting rules, managing controls and keeping pace with regulatory change. But as financial institutions grow more complex and AI becomes embedded in their operations, the limits of this approach are becoming harder to ignore. The challenge is no longer just understanding what the rules demand, but building the systems and processes to put them into practice consistently.
This is bringing compliance closer to engineering, where controls must be designed, tested and maintained rather than simply documented. For the RegTech industry, the question is whether this shift will fundamentally change how financial institutions build and manage their compliance functions.
In a new four-part RegTech Analyst Series, the focus shifts onto The Architecture of Compliance: Rebuilding RegTech for the AI era. This series examines compliance in the AI age, and what firms need to be paying attention to.
In the first part of a two-part series of part one we speak to key industry thought leaders to gauge their views.
Compliance: becoming a tech function?
Is compliance becoming a technology function? In the view of Areg Nzsdejan, CEO of Cardamon, increasingly, this is true.
“Turning a regulatory obligation into something a business can consistently execute requires structured data, workflows, controls and testing. Those are engineering problems, and compliance teams need to be involved in how they are solved,” he said.
The judgement, in his view, still matters hugely, as someone must decide what an obligation means for the firm and whether the resulting control is appropriate.
He added, “If that interpretation lives in one person’s inbox, every team ends up reconstructing it. Good infrastructure lets the business apply it consistently and revisit it when things change.”
Meanwhile, Zurab Kotaria, CEO of Identomat, sees that compliance is becoming increasingly tech-enabled but wouldn’t say it’s becoming purely a tech function.
“What is changing is the way compliance is delivered,” he said. “As businesses operate across more markets, regulations become more complex, and fraud becomes increasingly sophisticated, manual compliance processes simply cannot provide the speed and scale organisations need.”