106 to Payment Services Directive 3 and the Payment Services Regulation, to name just a few. AI is fast becoming a critical tool in helping organisations meet both regulatory expectations and business demands. “AI plays a critical role in helping financial services firms meet the stringent requirements of regulations by enhancing operational resilience and cybersecurity,” says Knox. “Advanced AI-driven analytics can scan regulatory updates across jurisdictions, identifying relevant changes and assessing their impact on business operations. This allows firms to adapt quickly and ensure ongoing compliance. “Compliance tools, powered by AI, also streamline reporting by automating data collection, validation and submission, minimising human error and improving efficiency. Machine learning models can predict regulatory trends by analysing historical data and enforcement actions, allowing firms to anticipate changes and implement controls in advance. Additionally, AI-driven risk assessment tools enhance decision-making by continuously monitoring transactions and operational risks. By integrating AI into compliance strategies, financial institutions can not only meet regulatory demands but also build a more agile, future-proof compliance framework. With continuous innovation in responsible AI, cybersecurity and privacy-enhancing technologies, Microsoft empowers financial services organisations to stay ahead of regulatory shifts, enhance transparency and streamline compliance.” These regulatory innovations are just one part of the broader AI transformation story across financial services. “AI can enhance risk management by providing real-time insights into market conditions, liquidity risk, credit risk and operational risk,” adds Pichach. “This allows banks to make informed decisions about their portfolios, optimise their risk exposure and improve overall financial performance. By demonstrating a proactive approach to risk management and customer service, banks can build trust and loyalty among their customers. “In addition, generative AI – including AI agents – improves operational efficiency by automating routine processes, freeing up human resources to focus on higher-value activities,” says Pichach. “This not only reduces costs but also enhances the customer experience by providing faster and more accurate services. The strategic use of AI can help banks differentiate themselves in a competitive market, fostering long-term customer relationships and driving business growth.” As fraudsters evolve, so too must the defences. With AI at the core of modern compliance and risk management strategies, financial institutions can not only detect and prevent threats more effectively, but also build trust, resilience and long-term value in an increasingly complex digital world. FEATURE J.P. Morgan is using AI to detect when emails are compromised
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