Regulatory attitudes towards artificial intelligence in financial services appear to be softening, as banks grow more confident that supervisors will increasingly support AI-led innovation.
New findings from a joint report between Hawk and Chartis indicate that most banking leaders expect a more favourable regulatory environment for AI in financial crime and compliance over the next two to three years.
The banking edition can be read here and the payment and FinTech version can be read here.
The report, AI in Financial Crime and Compliance: Charting the Path from Pilot to Maturity, examines how FCC professionals are deploying AI today and how those initiatives are expected to evolve.
When compliance and risk leaders were asked how regulatory attitudes to AI might change, 60% said they expect regulators to become more supportive in the near term, while a further 15% believe regulators will maintain their current positive stance.
Among respondents, 38% said regulators would become cautiously more supportive, gradually allowing wider AI use alongside safeguards and governance requirements. Another 22% said regulators would become significantly more supportive, actively encouraging AI adoption across regulated financial services.
Expectations vary by region. Optimism is strongest in Latin America, where 30% of banking leaders expect regulators to become significantly more supportive of AI. North America follows at 25%.
Despite this optimism, regulatory uncertainty remains a major barrier to adoption. When asked about the biggest challenges preventing greater use of AI in financial crime programmes, 73% of respondents cited regulatory concerns or a lack of clarity around supervisory expectations as a top issue. Crucially, these concerns often intensify during early adoption, with 37% saying regulatory risk increased as AI moved from concept to implementation.
Hawk’s explainable AI is designed to support this need, providing clear, natural-language explanations for decisions such as why transactions are flagged or cases are closed. This creates a detailed audit trail that compliance teams can rely on during regulatory reviews, helping banks balance innovation with accountability as AI adoption accelerates.
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