Starling was pleased to be invited to join the George Washington University Center for Law, Economics, and Finance’s third annual Fintech Forum on March 2, 2017. The Forum featured global industry leaders, academic experts, and government regulators, all of whom were brought together to discuss the future of new disruptive financial technologies and their implications for law around the world.
Starling co-founder Jeff Kupfer participated in the first panel, which was titled “Who’s Watching the Watchers: Using AI for Regulatory Compliance.” The other panelists were David Curran, Global Director of Risk and Compliance at Thompson Reuters, Amy Matsuo, Principal of Financial Risk Management at KPMG, and Ben Saul, a partner at White & Case.
After David provided an overview of artificial intelligence, Jeff was called upon to describe some specific examples where AI could be used for regulatory compliance. He talked about its applicability in any instance of prior misconduct, where it could be used to analyze data patterns and then predict where those some instances of bad behavior may take place. Jeff also described AI’s ability to help management better understand what’s happening in their organization, whether it is in ferreting out subcultures or gauging how well the three lines of defense risk model is functioning.
The panel discussed the future of AI for regulatory compliance. There was widespread agreement that regardless of any regulatory changes that may be made by the Trump Administration, AI had proved its value and that it was here to stay. Amy described the general benefits to institutions – whether it was in mapping regulatory requirements or helping with surveillance, testing, and monitoring (which is where Starling is focused). David pointed out that in the risk and compliance space, AI is something that banks are adopting for their own purposes, since it makes them more efficient and effective. Jeff noted that regardless of the regulatory environment, no bank wants to have its employees engage in misconduct and so any tool – like AI – that can help in that regard will continue to be developed and implemented.
The panel talked about how AI fit into the overall management structure of a bank. Jeff emphasized that Starling sees its technology as an additional management tool, something that augments – but does not replace – management decision-making. Ben summed up this point by pointing out that while IBM’s Watson may have beaten Kasparaov in a famous chess match, the best chess player today is a combination of a computer and a human – that the two working together are better than either one on their own.