Aptus.AI’s machine readable regulations presented at the last EFIF meeting


Daitomic selected as RegTech case study by the European Forum of Innovation Facilitators

Recent weeks at Aptus.AI have been full of important news and events. We have already talked about the selection of our proprietary AI technology by the Bank of Italy as one the first projects admitted to the Fintech Milano Hub. This opportunity enables us to cooperate with Italian banking authorities, aiming to work on the introduction of a standard machine readable format for publishing financial regulations. But the benefits that our Artificial Intelligence technology can introduce in the banking sector have also been recognized by European regulators, as confirmed by the inclusion in the EFIF meeting. In fact, the European Forum of Innovation Facilitators included Daitomic - our financial compliance AI solution - in the last meeting, in relation to the focus on RegTech.

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Aptus.AI at the table with Italian and European banking authorities: from BankIT to the EFIF

But let’s step back for a second. The EFIF was established in 2019 as a network of European regulatory hubs and sandboxes run by ESAs (European Supervisory Authorities), including the EBA (European Banking Authority), the ESMA (European Securities and Markets Authority) and the EIOPA (European Insurance and Occupational Pensions Authority), under the guidance of the European Commission, aimed at promoting greater coordination and cooperation between Innovation Facilitators. Just to sum up, EFIF’s goal is to allow supervisors to share experiences from engagement with firms through Innovation Facilitators (Regulatory Sandboxes and Innovation Hubs), to share technological expertise, and to reach common views on the regulatory treatment of innovative products, services and business models, overall boosting bilateral and multilateral coordination. After this explanation, it should be clearer the reason why we are very proud that our CEO Andrea Tesei has been invited to talk about Daitomic as a case study on Regulatory Technology topic for the lats EFIF meeting, which was held in May. Hence we had the chance to sit at the same table also with European banking authorities, after our already started work with BankIT in the context of the Fintech Milano Hub. Also during the EFIF meeting, the focus of our presentation was the Aptus.AI's proprietary technology which transforms financial regulations in a machine readable format, thus allowing the automation of specific steps in the regulatory alerting and analysis process.

A look at the EFIF meeting report: Daitomic’s state of the art and perspectives

Going deeper into the proceedings of the last EFIF meeting, we can follow the report recently published on the ESMA website. The presentation of our work at Aptus.AI was held within the RegTech session of the meeting, with a specific focus on Daitomic, as a solution that “provides financial institutions with a compliance tool enabled by converting regulations into an AI-based machine-readable format”. As reported by the EFIF itself, Daitomic’s AI engines also automatically perform all that regulatory analysis and tracking operations which currently are highly time-consuming and resource intensive, also leading to mistakes, delays and, in some cases, sanctions. As we have described in the dedicated page on Daitomic’s website, our work has started from a sample compliance workflow process, in respect of which Daitomic can apply its automated AI analysis, thus allowing humans to focus on the decisional and strategic aspects of compliance. As reported by the EFIF, our CEO Andrea Tesei also had the chance to answer some questions related to our AI technology, specifying that it is fully scalable and capable of adapting to new use cases specific for the securities and insurance sectors and also that the electricity consumption for training our AI models will not represent an issue with compliance processes based on a standard machine readable format. Concluding our intervention during the EFIF meeting, we had the opportunity to clarify that Daitomic also supports the impact assessments of new regulations, as a part of the iterative process that involves humans in designing the AI system, and also that the cross-border testing framework proposed by the EFIF (EU digital finance platform) would be potentially useful in bringing our tool to more jurisdictions.

Daitomic’s machine readable regulations to revolutionize banking compliance… and finance 

As reported a few lines ago, both Italian and European banking authorities are recognizing the validity and supporting the digitization process of banking compliance and, more in general, of the whole financial sector. Both the most important academic institutions - like the Massachusetts Institute of Technology - and banking authorities - like the EBA - have clearly addressed machine readable regulations as a key element in this necessary process, to enhance the information accessibility thus empowering humans in their compliance analysis and regulatory understanding activities. These considerations are even more valid when talking about hyper-regulated contexts such as banking, finance and insurance, in which the accessibility of data is essential to ensure efficiency and sustainability. The possibility of publishing regulatory documents in a machine readable format would increase the effectiveness of the compliance processes, offering a quicker, more precise and exhaustive regulatory consultation in a cross-regulatory and cross-country context, also helping reduce costs for the transposition of regulatory updates. Furthermore, the use of Artificial Intelligence for regulatory analysis would also give benefits concerning the ESG (Environment, Society and Governance) objectives, which are already at the center of the debate in the financial sector. But the possibilities that a tool like Daitomic would be able to introduce in the Regulatory Intelligence field are many more.