Can LLMs Do the Heavy Lifting When it Comes to Compliance?


The rapid evolution of technology has made regulatory compliance a daunting challenge. Firms must not only stay current with changing technologies but also navigate increasingly complex requirements. At the forefront of this field is Priya V. Misra, a pioneer in leveraging large language models (LLMs) to simplify compliance processes.

We recently spoke with Misra about his latest venture, the current regulatory environment, the landscape of LLMs, and advice for utilizing GenAI tools.

Tell us about EKAI and the problem you are trying to solve.

Priya V. Misra: EKAI is the first AI compliance ‘co-worker’ for risk and finance professionals. Newer regulations are more complex and require more frequent reporting. Traditional compliance platforms can’t keep up with these new reporting requirements. Our proprietary AI software, as a private SaaS platform, easily addresses these new compliance needs. EKAI supports the development of compliance plans and helps Chief Compliance Officers and managers digitally manage their compliance activities, preparing for regulatory engagements and submissions. We currently focus on new regulations like Operational Resilience, Consumer Duty, and ESG.

EKAI offers a natural language chat interface for ease of use. As the nature of data has evolved, compliance professionals in financial services need enhanced systems and tools to support their business and meet regulatory requirements cost-effectively. We tested our model with the UK’s Financial Conduct Authority in their sandbox and found regulatory alignment for a tool like ours to help the industry meet compliance requirements.

Banks and fintechs have always faced regulatory challenges. Why have concerns around regulation been heightened in the past few months?

Misra: Recent months have seen a shift towards new kinds of regulations, moving from ‘what’ to ‘how.’ Organizations now need to show evidence of how they meet compliance, not just state their approach. The regulatory focus is increasingly on consumer protection, with the UK’s Consumer Duty regulation likely to inspire similar regulations in Europe. This shift impacts costs, as firms must handle multiple, sometimes competing, regulatory priorities while maintaining business operations in a competitive talent market. Tools like EKAI give compliance professionals better oversight on their performance against compliance requirements across multiple programs.

How have you seen the conversation around GenAI and LLMs evolve in the financial services industry in the last year-and-a-half?

Misra: The conversation around GenAI and LLMs in financial services has evolved positively. Initial hesitations have given way to wider adoption, with tools like ChatGPT paving the way for productivity enhancements through business intelligence software like EKAI, which sits at the intersection of compliance. EKAI has pioneered the use of Small Language Models (SLMs) for AI in corporate settings. SLMs reduce the risks of AI implementation and allow for progressive feature deployment. They are also eco-friendly, requiring less GPU usage and quicker training times.

Apart from EKAI’s application of GenAI, what is the most powerful application of GenAI for financial services you have seen?

Misra: One of the most impactful GenAI applications in financial services is customer support. GenAI excels at using company-specific information to answer customer queries and can intelligently switch to a human counterpart for sensitive issues.

How do LLMs compare to traditional methods of regulatory compliance and risk assessment in terms of efficiency and accuracy?

Misra: Traditional methods work well for traditional regulations, which involve structured data and numbers. LLMs and GenAI are crucial for future compliance as they can handle unstructured data such as documents, messages, and transcripts. This capability provides a robust foundation for building and using compliance platforms.

What advice would you offer firms avoiding GenAI tools due to regulatory and compliance concerns?

Misra: GenAI and LLMs will eventually impact every industry. I advise firms to selectively embrace these technologies because they are inevitable. The upcoming GenAI Act in Europe will introduce benchmarks and controls that will promote wider and more confident adoption across industries. This transformation will enhance skillsets and create efficiency gains that future generations will benefit from.