A series of reports published this year has shown that, while artificial intelligence (AI) is helping companies ensure compliance through its growing presence in regulatory technology (regtech), it is also contributing to growing regulatory complexity around the world.
GlobalData’s recently published Regtech report notes that AI is already being used to aid regulatory compliance by automating routine compliance processes, improving monitoring and surveillance and strengthening risk management for organisations. It adds that generative AI, a subset of the broader technology, is being used to analyse vast amounts of historical data to generate accurate compliance reports or predictive insights.
The report predicts that AI will become deeply embedded across end-to-end compliance workflows and will transform regtech – itself a relatively emergent discipline, the term having been coined by the UK’s Financial Conduct Authority in 2015 – from reactive monitoring to proactive risk prevention.
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“AI will automate not just data analysis, but also regulatory interpretation, decision-making and continuous monitoring across jurisdictions,” it says. “Natural language processing and machine learning models will update compliance systems as new regulations emerge. This shift will reduce human error, cut costs and allow compliance teams to focus on strategic oversight instead of manual checks.”
The report asserts that, aided by AI, regtech will expand beyond the financial services sector, where it is currently most prevalent and advanced, to gain traction in healthcare, manufacturing and tech as regulatory complexity intensifies globally. Among the benefits it offers are reduced compliance costs, enhanced customer experiences through streamlined processes, improved risk management, greater scalability and adaptability of compliance capabilities and increased transparency and audit readiness.
AI driving regulatory complexity
However, despite its role in aiding regulatory compliance, AI is also contributing to an increasingly complex regulatory landscape, GlobalData has shown. Its Global AI Regulatory Landscape report details the divergent trajectories of countries around the world in regulating AI itself, with the EU leading the way in regulation focused mainly on protecting consumers, the US deregulating in an effort to boost business and China implementing strong government-oriented regulation. These varied approaches require multifaceted approaches to compliance by organisations operating across borders.
Furthermore, AI is having a knock-on effect on other areas of regulation, in particular data privacy.
Of that, GlobalData’s Data Privacy report states: “Generative AI’s widespread adoption across industries has increased the relevance of data privacy. In 2024, regulators globally proposed privacy-focused policies and legislation to manage the risks associated with emerging technologies. The EU’s AI Act, a landmark regulatory framework, addresses privacy concerns by categorising AI systems based on risk levels and imposing strict requirements for high-risk applications. Despite these efforts, rogue AI could make privacy legislation difficult to enforce.
“Greater scrutiny has driven organisations to reassess how they collect, store and process personal data to ensure compliance with these developing standards. Investing in advanced encryption methods will be necessary for companies to protect sensitive information without compromising AI’s capabilities.”
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