Large Language Models are profoundly changing work patterns in high-risk professional domains, yet their application also introduces severe and underexplored compliance risks. To investigate this issue, we conducted semi-structured interviews with 24 highly-skilled knowledge workers from industries such as law, healthcare, and finance. The study found that these experts are commonly concerned about sensitive information leakage, intellectual property infringement, and uncertainty regarding the quality of model outputs. In response, they spontaneously adopt various mitigation strategies, such as actively distorting input data and limiting the details in their prompts. However, the effectiveness of these spontaneous efforts is limited due to a lack of specific compliance guidance and training for Large Language Models. Our research reveals a significant gap between current NLP tools and the actual compliance needs of experts. This paper positions these valuable empirical findings as foundational work for building the next generation of Human-Centered, Compliance-Driven Natural Language Processing for Regulatory Technology (RegTech), providing a critical human-centered perspective and design requirements for engineering NLP systems that can proactively support expert compliance workflows.

RegTech allows companies to better manage regulatory compliance, but it is also a valuable tool to create added value and innovatively grow the business. But for this to be possible, companies need to implement specific technologies, which are the basic conditions for developing a good RegTech system, such as blockchain, AI, and RPA. When building a business and imagining strategies and ways to grow, one cannot help but take into account the regulations and operational and procedural requirements established by the legislature for a given industry, including when it comes to RegTech and regulations. Often, regulation is considered as an element that hinders or slows down the development of the business. In other words, one often perceives the conflict, the opposition between regulation and the development and growth of an entrepreneurial project.

Founded in 1991, India-headquartered HCL Technologies is a global technology company that helps enterprises reimagine their businesses for the digital age. The company specializes in key areas, including digital, IoT, cloud, automation, cybersecurity, and analytics, amongst others. With the company increasingly having a presence in the RegTech space, how does it see the sector changing? How is RegTech changing compliance? According to Daryl Wilkinson – Senior Executive, Strategic Initiatives, Financial Services UK&I at HCL Technologies, "I think you can look at this through two lenses. First, there appears to be a consensus that the global RegTech market is expected to achieve $30bn by 2027 – so that alone is changing the compliance market –new investment is disrupting incumbent models and is changing the way regulators engage with businesses. The second lens is cost; financial services rely heavily on legacy technology – RegTech's nature is to find that niche to solve those problems at a much lower cost than the banks and insurers might otherwise do themselves."

In recent years, players within Canada's financial services industry, from banks to Fintech startups, have shown early and innovative adoption of artificial intelligence ("AI") and machine learning ("ML") within their organizations and services. With the ability to review and analyze vast amounts of data, AI algorithms and ML help financial services organizations improve operations, safeguard against financial crime, sharpen their competitive edge and better personalize their services. As the industry continues to implement more AI and build upon its existing applications, it should ensure that such systems are used responsibly and designed to account for any unintended consequences. Below we provide a brief overview of current considerations, as well as anticipated future shifts, in respect of the use of AI in Canada's financial services industry. At a high level, Canadian banks and many bank-specific activities are matters of federal jurisdiction.

This is higher than the global average of 47%, and quite understandable when read alongside the UK government's own report showing that nearly half (46%) of all businesses have been the victim of cybercrime in 2020 alone. Money laundering and terrorist financing are similarly huge industries: the National Crime Agency (NCA) considers it a'reasonable possibility' that the scale of money laundering in the UK is in the hundreds of billions of pounds. Given how pervasive digital crime is, the overall trajectory of the payments industry might seem counter-intuitive. More transactions are taking place online than ever before, meaning that finding fraudulent transactions is like finding a needle in a haystack that keeps growing. With millions of transactions being processed each day comes the need for regulation, so everyone at every step of the payment processing journey needs to ensure that they are compliant with evolving legislation.

Over the last year, we saw a greater shift towards automation and AI applications to streamline insurance, including increased usage of augmented reality to support activities ranging from warning of risks, explaining insurance plans, estimating damages and increasing brand awareness. We also saw insurers starting to explore greater use of blockchain, the tech behind cryptocurrencies, to better support operations. With this came a greater emphasis on cybersecurity, with the expectation for more proactive and preventative measures. As we enter the next decade, we'll continue to see unprecedented growth in innovation in the Insurtech space, which has set up the industry for more market advancements in an increasingly complex environment. The Canadian insurance industry has been largely inert and less agile in the past, and it's this environment where Insurtech has made its mark.

Jokingly dubbed "deal prevention units" by some front-office staff, compliance teams now have the third most-stressful City jobs after that of an investment banker and a trader. Pre-crisis, pre-Brexit and pre-cybercrime, compliance used to be (almost!) a stress-free job with regular hours. As regulatory pressure intensifies and personal liability mounts, compliance officers are under increased pressure do the right thing every time, personally and professionally. Our latest research, The Cost of Compliance and How to Reduce It, shows that a typical European bank, serving 10 million customers, could save up to €10 million annually and avoid growing fines by the regulator by implementing technology to improve the "Know Your Customer" (KYC) processes. Following new EU Anti-Money Laundering (AML4/5) and Counter-Terrorist Financing (CTF) rules extending the scope of KYC requirements, the cost each year of punitive non-compliance fines is now €3.5 million.

In the last 10 years or so, global financial institutions and regulatory bodies have come together to unleash a battery of regulations for Banking, Insurance, and Micro-economies. The advancement of new technologies such as AI, Machine Learning Engineering, Big Data, Cloud and Edge Computing, Blockchain and Crypto, and low-code DevOps, have heavily disrupted the RegTech industry. This primer dives deep into the world of Regulatory Tech, or RegTech which is disrupted by the new emerging technologies. But, first, let's learn some basic definitions and industry trends. In a recent blog, Brian Clark, CEO of Ascent had said that RegTech is slated to become mainstream, even as early adopters begin "to see the actual, tangible benefit" these RegTech tools can provide.

We asked 9 industry experts to contribute their thoughts on the year ahead, and a common theme was the need for these technologies to mature, with the genuinely useful implementations finally getting to market. Expanding on last year, we have chosen seven areas of interest to focus on in 2019. Each represents a vital area of innovation in the financial industry, and has a particular relevance to Luxembourg's thriving financial technology ecosystem. Each week we will be choosing one of the topics to focus on, both in the content we share on social media, but also in a dedicated newsletter looking at the top five stories from that week. First, let's introduce the topics with some of our favourite summaries for the uninitiated: "Regtech growth will explode in 2019 because regulators worldwide will start truly driving it. Multiple countries will hold a joint hackathon at midyear, aiming to use technology to remove one of the biggest regtech blockers: how to share data widely to find risk patterns and fight financial crime, while fully protecting privacy and cybersecurity. Solutions will solve myriad regulatory problems. Even more importantly, the shared experience will move regulatory bodies into a new era of active innovation and collaboration with each other, industry, and academia. Anti-money laundering will continue to be a leading use case, because the current system is so broken and costly and there's so much low-hanging fruit to harvest through technology. We'll also see AI and blockchain solving more problems, from digital identity and financial fairness and inclusion to API-based regulatory reporting, machine-readable regulations, and even machine-executable compliance. These regulatory breakthroughs are not just nice-to-have. They are essential, if fintech innovation is to flourish. The regulations are the rules of the road we're all traveling."

"Technology is the engine of change," opened the CTO panel's moderator, Sandeep Roychowdhury, founder and director at SMEinnovation, during Information Age's Tech Leaders Summit. To navigate this "dark forest," as Roychowdhury put it, industry leaders are diversifying. Sharon Moore, CTO for Public Sector at IBM, explained that while IBM is a leader in cloud and infrastructure, "there was public opinion that we were behind with regards to public cloud, and I believe the Red Hat acquisition has assisted with removing that perception," she said. IBM has used collaboration to stake a claim in this environment and in Moore's view it's clear that "multi is the way forward. "Businesses must manage across multiple cloud providers.