Banking Compliance – Testing and Monitoring: Open AI’s role in transforming the landscape: Interview with Fintech Expert Kinil Doshi

July 11, 2024

Kinil Doshi is a renowned Fintech expert in Banking Compliance and Risk Management, boasting two decades of extensive experience in the financial services and technology sectors.

Kinil Doshi

He has played a pivotal role in global corporations in successfully implementing Fintech solutions across various banking verticals. Kinil has proficiently navigated and addressed complex compliance and risk challenges using tech-enabled solutions. He has pioneered and directed product strategy for a comprehensive suite of Risk and Compliance applications.

Kinil holds a Master’s degrees in Management, Business Administration, and Commerce, complemented by specialized IT certifications. His thought leadership is further evidenced by his numerous publications on Fintech and Banking in reputed journals. He has also served on program committees, editorial boards and conducted peer reviews for reputed journals. He plays active role as jury member for reputable award organizations in Technology and Business which include Brandon Hall Group, Finovate, Globee Awards and others.

Kinil Doshi is an eminent member of the Forbes Technology Council, and a distinguished Senior Member of IEEE. This is further evident as he has been accoladed with Prestigious 2024 Global Recognition Award as well as prominent publication houses such as Finance Digest, Digital Journal, International Business Times, MSN, and TechBullion have featured Kinil’s insights on various topics for their readership

Currently Kinil Doshi is a Sr. Vice President Position with Citi bank where he is responsible to bring technology transformation in compliance. In this interview with our Global Banking & Finance Review team, he discusses how Open AI is bringing transforming in Testing and Monitoring compliance for Banking Industry.

1)What is Open AI and how is it relevant to the Banking industry?

Open AI is an artificial intelligence technologies and platforms made in such a way that they are more accessible by any organization, including the banks. Open AI refers to all the machine learning models, natural language processing systems, predictive analytics and other artificial intelligence-based solutions which can be plugged into various business processes and operations. In the banking industry, Open AI is particularly relevant for enhancing compliance, improving testing and monitoring processes, and driving operational efficiencies.

OpenAI technologies are being increasingly integrated into the banking sector to enhance compliance by leveraging advanced natural language processing (NLP) and machine learning (ML) capabilities. These technologies assist in automating the monitoring of transactions, identifying suspicious activities, and ensuring that all operations align with regulatory standards.

2)How can Open AI improve Compliance Testing in Banking?

Open AI Cloud can revolutionize compliance testing in banking by automating mundane functions and facilitating real-time analysis which has the power to spot likely compliance dangers. AI-powered algorithms also have the ability to sift through massive volumes of data in order to identify any anomalies, suspicious or unusual transactions, and compliance with the predefined regulations. They can even offer forward-looking views, helping banks foresee and mitigate potential compliance challenges before they escalate.

3)What specific benefits does Open AI offer for monitoring activities in banking compliance?

Open AI offers several benefits for monitoring activities in banking compliance, including:

1. Real-Time Monitoring: AI systems can continuously monitor transactions and activities, providing instant alerts for any irregularities or non-compliance issues.
2. Enhanced Accuracy: AI reduces human error by accurately analyzing large datasets and ensuring precise compliance checks.
3. Cost Efficiency: Automating monitoring processes with AI reduces the need for extensive manual oversight, lowering operational costs.
4. Scalability: AI solutions can easily scale to handle increasing volumes of data as a bank’s operations grow.

OpenAI has significantly enhanced testing and monitoring processes. AI models can simulate various scenarios to test the robustness of compliance frameworks and identify potential vulnerabilities. Additionally, continuous monitoring powered by AI ensures that compliance systems remain up-to-date with the latest regulations and can adapt to new threats as they emerge. This proactive approach helps in maintaining a high standard of compliance and risk management.

4)Can you provide an example of how AI is used in compliance monitoring?

One notable example is the implementation of AI-driven transaction monitoring systems. Previously, manual reviews of transactions were not only time-consuming but also prone to human error. By integrating OpenAI’s NLP and ML capabilities, we have automated the analysis of transactions, significantly reduced false positives and improved the accuracy of identifying suspicious activities. This has not only enhanced our compliance efficiency but also allowed our team to focus on more complex compliance issues that require human expertise.

Another example is, banks are building AI solution to scan through the different banking landscape like regulatory changes, regulatory exams, emerging risk, risk assessment and other inputs to identify risk and ensure to have appropriate coverage to mitigate the risk

5)What challenges do banks face when integrating Open AI for compliance purposes?

Despite its benefits, integrating Open AI for compliance purposes comes with challenges, such as:

1. Data Privacy and Security: Ensuring the security and privacy of sensitive financial data when using AI solutions.
2. Regulatory Compliance: Navigating the complex regulatory landscape to ensure AI implementations comply with all relevant laws and standards.
3. Integration Complexity: Integrating AI systems with existing banking infrastructure and ensuring seamless operation.
4. Talent Gap: Finding and retaining skilled professionals who can develop, implement, and manage Open AI solutions effectively.

6)How can banks overcome these challenges?

Banks can overcome these challenges by:

1. Investing in Robust Security Measures: Implementing advanced encryption, access controls, and data anonymization techniques to protect sensitive information.
2. Collaborating with Regulators: Working closely with regulatory bodies to ensure AI solutions are compliant and to stay updated on regulatory changes.
3. Phased Implementation: Gradually integrating AI solutions into their systems, allowing for testing and adjustments to ensure smooth operation.
4. Training and Development: Investing in training programs and hiring skilled AI professionals to bridge the talent gap.

7) What is the future outlook for Open AI in banking compliance?

The future of Open AI in banking compliance looks bright. However, with the continued evolution of AI technologies as well; data analyst functions that were once replicable by software systems will increasingly more accurately and sophisticated. By doing so, banks be able to gain the highest levels of compliance and as a consequence mitigating the risks associated with collapses which also leads to much higher operational efficiency. In addition, improved AI is likely to result in new and innovative compliance-solutions that are created specifically for the banking industry’s compliance requirements.

8)How can banks start leveraging Open AI for compliance testing and monitoring?

Banks can start leveraging Open AI for compliance testing and monitoring by:

1. Conducting a Needs Assessment: Identifying specific compliance areas that can benefit from AI integration.
2. Choosing the Right AI Tools: Selecting AI platforms and tools that align with their compliance requirements and operational goals.
3. Partnering with AI Experts: Collaborating with AI technology providers and consultants to implement and optimize AI solutions.
4. Continuous Improvement: Regularly reviewing and updating AI systems to adapt to changing regulatory landscapes and emerging compliance challenges.

Kinil Doshi’s Conclusion

As per Doshi, banks can transform their compliance testing and monitoring processes, ensuring they remain robust, efficient, and adaptive to the evolving financial landscape by strategically implementing Open AI