Nasdaq Study Reveals Shift Towards AI and Data Science in Financial Compliance

AI and Advanced Technologies Drive Compliance Process Change

Nasdaq's ninth Annual Global Compliance Survey has revealed a significant shift in the financial services industry's approach to regulatory compliance. The survey, which gathered insights from 94 compliance professionals across various sectors, indicates that firms are increasingly turning to artificial intelligence (AI) and advanced technologies to address complex regulatory challenges 1

1

According to the survey, 35% of respondents expect AI and related technologies to be the primary driver of compliance process change in the coming year. This marks a substantial increase from 9% last year and 0% the year before, signaling a rapid adoption of these technologies in the compliance sector 2

2

Investment in Data Quality and Cloud Integration

The survey highlights key areas where firms are likely to invest over the next 12 to 24 months. These include improving data quality, integrating data sources with cloud technology, and developing cross-product surveillance tools. A major challenge that these investments aim to address is the reduction of false positives in automated alert systems 3

3

Nearly 90% of compliance teams acknowledge that minimizing false positives remains a significant challenge. These false alerts can lead to unnecessary investigations, wasted resources, and potential delays in identifying genuine threats. Advanced data processing and AI are seen as potential solutions to improve the quality of automated alerts.

Shift in Talent Acquisition and Budget Allocation

The survey reveals a notable shift in how firms are allocating their resources. Looking ahead, companies are redirecting their investment in talent towards data scientists (12%) and additional support staff (13%). This trend reflects a growing recognition of the importance of advanced technology and sophisticated data analysis in modern compliance systems 4

4

Ed Probst, Senior Vice President of Regulatory Technology at Nasdaq, commented on this trend: "Technologies like AI and cloud have the power to enhance strategic insights and dramatically improve efficiency but require a workforce able to understand, develop, and deploy the capability" 1

1

Related Stories

Nasdaq Integrates AI to Revolutionize Portfolio Risk Calculations for Banks and Insurers

Financial Services Firms Ramp Up AI and Digital Asset Investments Amid Data and Legacy Tech Challenges

AI Agents Reshape Compliance as Financial Regulators Race to Deploy Autonomous Systems

Nasdaq Verafin Launches Agentic AI Workforce to Revolutionize AML Compliance

Compliance Teams Maintain Influence in Business Decisions

The survey also indicates that compliance and surveillance teams continue to play a crucial role in business decisions. A significant majority of respondents either strongly agreed (44.7%) or agreed (31.3%) that these teams have a "seat at the table" in their organizations. This underscores the integral role of compliance in risk management, ethical business practices, and corporate governance 2

2

Continued Growth in Compliance Spending

While the pace of growth is moderating, regulatory-focused spending continues to rise. Over 40% of firms reported increased compliance spending this year, consistent with the steady budget increases observed in previous surveys. However, there has been a significant shift in how organizations allocate their tech budgets, moving away from traditional workflow and transaction monitoring towards investment in advanced analytics 3

3