The AI Book

CHAPTER 60The Changing Face of Regulatory, Compliance and Audit

By Shailendra Malik¹

¹Vice President – IT Platforms, DBS Bank

Why We Need Compliance and Audit

We humans, as a society, have evolved significantly with the advances in technology and automation, which have simplified a lot of menial tasks we did in the past. From manual labour to automated machines, from clerical work to structured and reliable data collection and processing, and even from instinct-based decisions to informed, logical and structured decision-making, technology has been the backbone of this human evolution.

Humans, however, also procrastinate, become lazy and sometimes take short cuts to achieve success. These negative qualities push them into doing things that are risky, sometimes illegal or finding ways to beat the rules that we, as a society, have put in place and expected to abide by. This creates challenging problems for us to solve, such as how to identify cheating acts, detect fraud and distinguish them from other forms of misconduct in day-to-day transactions. Hence the need to have a system of internal controls to detect occurrence of any wrongdoing supplemented by regulatory oversight – supervision of a group by an outside body in order to control or direct according to rule, principle or law.

As we progress towards a more urbane way of conducting business transactions, the nature of fraud has become complex too, bringing a new set of challenges for compliance officers, who are increasingly ...