AI-based Compliance Automation in Commercial Bank: How the Silicon Valley Bank Provided a Cautionary Tale for Future Integration

Abstract

By analyzing the failure of Silicon Valley Bank, this paper emphasizes the significance of regulatory compliance and the risks associated with non-compliance. It highlights the importance of financial institutions regularly reviewing and adjusting their investment strategies to align with market conditions and risk tolerance levels. The adoption of advanced technologies such as Financial Enterprise Control Intelligence (FECI) systems is essential in managing regulatory compliance and risk management processes effectively. These systems leverage artificial intelligence and data analytics to automate and streamline compliance and risk analysis, including compliance reviews, risk analysis, and risk exposures. After the discussion of the guiding principles for establishing internal control systems in commercial banks and explores the recent developments in AI-based compliance automation. It concludes by emphasizing the role of AI-driven FECI systems in ensuring regulatory compliance, managing risks, and navigating the evolving financial landscape.