Developing AI Regulatory Compliance Checking System
Regulatory Compliance AI automatically checks documents, processes, and actions against regulatory requirements. Reduces fines and sanctions risks through systematic monitoring.
Application Areas
Financial compliance: compliance with Central Bank requirements, AML/CFT, MiFID II, Basel III. Contract and product verification against standards.
Personal data: compliance with data protection regulations, GDPR for international companies. Document analysis for unauthorized personal data.
Labor law: verification of employment contracts, internal policies, HR documents against labor law.
Industry regulation: healthcare (licensing, treatment standards), pharmaceuticals, construction (technical regulations).
RAG-based Compliance Architecture
class ComplianceCheck(BaseModel):
document_type: str
jurisdiction: str
violations: list[Violation]
warnings: list[Warning]
compliant_aspects: list[str]
overall_status: Literal["compliant", "minor_issues", "violations", "critical_violations"]
applicable_regulations: list[str] # links to applicable standards
recommendations: list[str]
def check_compliance(document_text: str, doc_type: str, jurisdiction: str) -> ComplianceCheck:
# Load applicable regulatory requirements
regulations = regulation_rag.search(
f"{doc_type} compliance requirements {jurisdiction}",
top_k=10
)
return llm.parse(
build_compliance_prompt(document_text, regulations, doc_type),
response_format=ComplianceCheck
)
Regulatory Document Database
RAG-base includes:
- Federal laws and regulations
- Regulatory requirements from central banks and oversight bodies
- Technical regulations and standards
- International standards (ISO, IFRS, SOX for international companies)
- Regulatory clarifications and guidance
Updates: subscription to official legal databases with automatic indexing of new documents.
Regulatory Change Monitoring
New regulatory act → automatic assessment: what does it affect? Which internal documents need updating? Alert responsible parties. Timeline: laws take effect with delay — time for adaptation.
Implementation Timeline
Months 1–2: RAG on applicable regulatory bases, basic compliance checks
Months 3–4: Priority compliance area coverage, document workflow integration
Months 5–6: Regulatory change monitoring, compliance officer dashboard