Small Businesses Unleash the Power of Artificial Intelligence for Smarter Compliance
A recent breakthrough by identity and compliance platform Palm has sparked a wave of digital innovation among small and medium-sized businesses (SMBs) in their pursuit of effortless compliance with increasingly complex regulations.
With its newly-introduced Beneficial Ownership Information (BOI) Filing Assistant, an AI-powered filing tool, Palm aims to speed up the tedious and often daunting task of compliance management. By leveraging sophisticated artificial intelligence algorithms, this cutting-edge solution empowers SMBs to automate their compliance processes, reducing costs associated with manual processing, error correction, and external audits.
This technological leap is particularly significant in light of statements made by Nicole Argentieri, principal deputy assistant attorney general for the Department of Justice (DOJ), who emphasized during a September gathering that prosecutors will scrutinize the effectiveness of a company's compliance programs during investigations. Compliance systems adhering to the DOJ’s Evaluation of Corporate Compliance Programs (ECCP) guidelines may also reap benefits from more lenient treatment in such probes.
According to Freda Pepper, General Counsel at Sovos, banking-specific compliance can be a particularly daunting challenge. With an ever-changing landscape characterized by shifting laws and regulations, state requirements become increasingly difficult to stay current with – much like constantly chasing a moving ball. The introduction of AI-powered solutions for compliance aims to level the playing field, providing even smaller businesses with access to previously inaccessible technologies.
PYMNTS Intelligence reports that 61% of surveyed SMBs now use artificial intelligence (AI) to automate daily tasks, and while Sovos President Alice Katwan acknowledges AI as an essential tool in their business arsenal, noting its pivotal role in predictive analytics, it is imperative for companies to leverage AI proactively. The ability to harness the full power of AI transforms compliance from a burdened requirement into a strategic advantage, enabling smaller businesses to maintain high standards without straining efficiency or budgets elsewhere.
With increased use of AI in navigating compliance requirements, an estimated 4.5% share of annual sales is lost to fraud by companies relying on legacy and manual verification solutions. In contrast, businesses utilizing proactive automated solutions such as those powered by AI and machine learning typically achieve losses averaging around 2.3%.
AI capabilities are proving especially valuable for tasks requiring substantial documentation management processes, like KYC (Know Your Customer) and anti-money laundering protocols. These tools utilize natural language processing (NLP), enabling the rapid extraction, classification, and analysis of large volumes of documents, effectively eliminating tedious manual work and reducing errors.
As regulations continue to evolve and deepen in complexity, AI-facilitated compliance solutions stand poised to empower an increasingly larger segment of small businesses nationwide to stay ahead by adapting to changes rather than merely identifying them.