On May 21, 2024, the European Commission officially approved the Artificial Intelligence (AI) Act, marking a historical day both for the EU and the International Regulatory world. This first-of-its-kind law promotes the development and integration of artificial intelligence systems for both businesses and end users within the European Union.
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On May 21, 2024, the European Commission officially approved the Artificial Intelligence (AI) Act, marking a historical day both for the EU and the International Regulatory world. This first-of-its-kind law promotes the development and integration of artificial intelligence systems for both businesses and end users within the European Union.
The AI Act aims to create a safe and transparent environment for new technologies, attracting significant interest from the financial world and offering new investment opportunities for businesses and private investors.
Key requirements of the AI Act
The regulation requires entities to assess the impact on fundamental rights, ensure transparency, register high-risk AI systems, and inform end users when emotion recognition is used before deploying such AI in public services. The Regulatory Framework defines four levels of risk for AI systems: minimal, limited, high and unacceptable risk.
Timeline and Implementation
The AI Act is currently undergoing formal adoption and translation. It will take effect 20 days after being published in the Official Journal and will be fully applicable after 2 years, with certain exceptions:
- prohibitions will start after six months, governance rules
- obligations for general-purpose AI models after 12 months, except for General Purpose AI (GPAI) systems that were already in place before that date, which will have an additional 24 months to comply
- and rules for AI systems embedded in regulated products after 36 months.
Companies that use AI and regulatory technology proactively will become leaders in the industry, setting higher standards for compliance and shaping the future of financial institutions and beyond.
cleversoft AI-driven Services
As a leading RegTech provider, cleversoft is at the forefront of integrating AI into our service suite, improving the way we support your compliance needs.
- Enhancing Transaction Monitoring with AI:
Our cleverForensic Detection leverages AI technologies such as determining Expected Financial Behaviour (EFB) of every client. This innovative approach allows for the precise detection of anomalies, flagging them as outliers and alerting users promptly. The system’s intelligence is further enhanced by incorporating user feedback, which is fundamental for refining the AI’s learning process. Additionally, our system offers Smart Samples, providing users with transactions that are on the threshold of being anomalies for further scrutiny. - Advanced Data Extraction and Analysis:
Within the scope of Name Screening and Identity Verification (ID&V), our cleverKYC utilizes AI technologies including sentiment analysis in Adverse Media screening and sophisticated algorithms that streamline and enhance data extraction processes, ensuring more accurate and efficient verification. - Innovative Reporting Solutions:
cleversoft is continually exploring new AI-driven solutions, and on that regard we are working on introducing sample pre-defined narratives for regulatory reports, such as those required under the Corporate Sustainability Reporting Directive (CSRD). These narratives are designed to simplify your reporting processes. - Exploring the Future of AI Integration:
Our ongoing investigations are focused on integrating cutting-edge technologies like Optical Character Recognition (OCR), ID Reader technologies, and Power BI for advanced data visualization. These enhancements, particularly in our cleverKYC service, promise to provide deeper insights and more comprehensive data analysis.
Regulatory compliance for European financial institutions is stricter and more demanding than ever, requiring meticulous attention to detail in reports and disclosures. cleversoft, with 20 years of experience as a Tier-1 RegTech company, excels in this area.
Our goals are to improve data governance, risk assessment, and provide reliable service. AI has enhanced our service coverage and productivity while reducing client workload. The official approval of the EU’s AI framework ensures our AI-driven services comply with the new regulations.
For further information on any of the above points, please contact us via the contact form on our website. Our experts will be happy to answer your questions.