BWC’s 2026 publication series on artificial intelligence in financial services continues with its third paper, which examines how generative AI can help financial institutions streamline risk management and compliance functions.
Given their internal focus on analysis and decision support rather than direct client interaction, these areas offer a high-value, comparatively low-risk entry point for AI adoption. This paper recommends prioritizing deployment in high-impact control functions such as anti-money laundering, fraud detection, and regulatory compliance, while keeping humans responsible for final decisions and governing AI through existing regulatory frameworks.
Realizing these benefits requires strong governance and human oversight. AI supports compliance professionals rather than replacing them, and institutions must actively manage risks such as poor data quality and overreliance on model outputs.
The paper also looks ahead to agentic AI, which can coordinate multi-step workflows, including data collection, report drafting, and investigation preparation, prior to human review. It concludes that existing regulatory frameworks already apply to AI in these functions through established principles of model risk, operational risk, and compliance accountability.
