Synergising AI and human intelligence – the future of compliance management

Published on July 28, 2025 by Ladlee Bhatia and Anshuman Bhawsar

Introduction to AI

Whenever there has been innovation in technology, human life has changed drastically for the better. Artificial intelligence (AI) is no less than a technological revolution. Sundar Pichai, CEO of Alphabet Inc., is quoted as saying that “AI is probably the most important thing that humanity ever worked on. I think of it as something more profound than electricity or fire.”

AI has proven to be of help to human beings – from organising daily tasks to offering more complex algorithms. It has shown its ability to understand human needs and interact with humans to provide solutions for both mundane and complicated problems. AI has also made it possible to analyse market trends and compile business models without human intervention.

However, the combination of AI and humans could transform how the world operates. AI’s ability to adapt, together with human intelligence to drive the subjective narrative, could revolutionise the working environment. This blog discusses this collaboration.

Growth of AI – statistics

AI in compliance – an introduction

With the expansion of global markets, compliance has become an integral function for all financial institutions, ensuring they adhere to regulatory requirements and avoid regulatory breaches. AI in compliance is playing a pivotal role, enhancing the compliance framework with the use of AI models that enable risk monitoring and assessment. AI complements compliance, making it a more robust function.

The role of AI in compliance segments such as code of ethics, forensic analysis, AML/KYC assessments, marketing material review and electronic communication surveillance is becoming increasingly important. AI has a pivotal role to play in compliance.

How AI enhances the compliance function

Enhances monitoring of alerts

Using AI in compliance enhances monitoring of alerts and timely detection of red flags. Agentic AI can help reduce the lag in identifying alerts and processing them. Since agentic AI can detect trading patterns as well as keywords in employee communications, it can identify nuanced compliance issues at an early stage, significantly reducing the risk of delay. Agentic AI acts in an autonomous environment with self-learning ability. It can autonomously identify an alert, assess risk and suggest corrective measures, reducing the time taken to identify alerts and process them.

Reduces number of false positives and helps with audit trails

AI tools can help reduce the high volume of false positives identified during manual review. By inserting correct prompts to the model, AI can correctly identify true alerts in transaction monitoring and sanctions screening. Agentic AI provides an audit trail of the alerts, specifying the reason for closure of false alerts.

Assists with manual tasks

Repetitive tasks such as initial review of marketing material and detection of red flags in AML processes, identifying key words during communication surveillance, report extraction, checks and validation and assisting employees with day-to-day queries can be streamlined by AI while compliance professionals focus on complex and strategic projects. Since agentic AI can adapt  and learn from changing environments, it can handle manual tasks. Agentic AI learns from the patterns of routine tasks, leading to efficient resolution of daily queries in a timely manner without human intervention.

Translating documents

AI can assist with translating and reviewing non-English-language documents, while avoiding a personal information breach. In reviewing marketing material and statements provided by employees, AI tools can also translate documents, adhering to personal information guidelines.

Why is human intervention needed?

Although agentic AI has the potential to reshape the compliance function, human intervention would still be required at every step of this core challenge function.

• Mitigating privacy risk. Since there is increasing concern about maintaining privacy with AI, human intelligence would help mitigate the risk associated with sensitive data. Agentic AI uses such data to adapt and act in line with the environment autonomously; this increases the risk of a data leak. Human intervention would prevent the risk of a privacy breach while collaborating with AI.

• Subjectivity in compliance. AI may face difficulty in handling non-standard cases or ambiguous content that does not fit predefined patterns. The subjectivity required in reviewing alerts, complex material and electronic communication would require human intervention.

• AI hallucinations. Flawed or incomplete data would lead to errors in output; these could seem correct factually but would be incorrect. This is known as hallucination. Human oversight is crucial to address these errors, provide nuanced judgement and ensure robust frameworks. Regular audits, scenario testing of AI systems and collaboration between AI and experts help build trust and maintain system integrity.

• Low confidence among firms and regulators. Firms are sceptical about using AI due to uncertainty relating to meeting regulatory standards. Although agentic AI can be up to date with regulatory changes, they believe excessive use of AI is risky. Collaboration between compliance professionals and AI would be key.

• Ethical and legal concerns. AI raises questions relating to copyright, intellectual property and ethical responsibilities in areas such as audience targeting and messaging. Agentic AI creates biases, as it functions on predefined workflow. These challenges can be mitigated by ensuring a good balance between AI and human collaboration or investing in ethical AI practices.

Conclusion

Although AI tools are rational, accurate and data-driven, humans possess emotional intelligence, creativity and intuitive sense. While we adopt the use of technology, it is imperative to understand the risks associated with AI and the role we play in reducing these.

AI and humans are not in competition with each other; rather, they must complement each other’s work to enhance the efficiency of compliance and meet regulatory requirements. Partnership between AI and humans is a collaborative effort towards strengthening the compliance function.

How Acuity Knowledge Partners can help

We provide expert guidance and a range of bespoke services including marketing material review and advertisement review, regulatory compliance review, distribution compliance, code of ethics monitoring, electronic communication monitoring and social media surveillance. Combined with our expertise in compliance, our subject-matter experts maintain internal controls and help redesign workflow to mitigate inherent and potential risks identified under any policy or regulation; combined with AI expertise, this ensures accuracy and reliability. Our inhouse experts validate and enhance output with the assistance of Acuity Agent Fleet that is fully traceable. It saves time by configuring workflow and the desired output. For more details, please refer to the following: Generative AI for Financial Services | Acuity Agent Fleet | Acuity Knowledge Partners.

References:

• How the AI Revolution Will Reshape the World | TIME

• Exploring The Future Of AI: Unlocking The Potential

• Five Lessons Learned On Using AI In HR And Compliance

• AI in Compliance: Streamlining Regulatory Compliance with Generative AI

• How AI will affect compliance organizations | EY – US

• The great tech rush: After DeepSeek wake-up call, how India plans to get a seat at AI high table | Long Reads News – The Indian Express

• The Leap From Automation To Intelligence: Getting the Scoop on AI in Employee Regulatory Compliance | StarCompliance

• AI Should Augment Human Intelligence, Not Replace It

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