Eflow Global, a leading provider of regulatory compliance technology, has today announced the launch of PATH AI, a new AI-powered functionality integrated into its award-winning TZTS Trade Surveillance system. As trade surveillance enforcement surges and regulators increasingly demand that firms can articulate their use of AI in compliance processes, PATH AI delivers explainable and contextualised insights that enable compliance teams to investigate trading alerts more efficiently.
With fines relating to market abuse enforcement reaching $1.8 billion in 2024 – the second-highest annual total on record across 163 cases – and regulators repeatedly citing weaknesses in trade surveillance processes, financial institutions face mounting pressure to strengthen their compliance capabilities. Enforcement action related to failures of trade surveillance systems and controls has surged by more than 800% year-on-year, making robust and explainable AI tools essential for firms managing growing volumes of trading data whilst meeting regulators’ demands for transparency.
The FCA has emphasised that firms must be able to explain how AI systems reach their conclusions, with particular scrutiny on ‘black box’ approaches that generate alerts without transparent reasoning. PATH AI directly addresses this requirement by ensuring every insight is fully traceable to its source data, allowing firms to demonstrate both to regulators and senior management exactly how conclusions were reached.
Through an intuitive interface, users can investigate alerts using conversational prompts to access contextualised information. For example, they can identify whether a trader has triggered similar alerts within a specific period, generate case summaries for escalation, or explore linked patterns of behaviour. All data points are fully referenced to support regulatory audit requirements, with a chat history tracking conversations for reporting and escalation purposes.
The system also dynamically suggests relevant prompts based on the questions being asked, enabling compliance teams to explore different investigative routes efficiently.
Ross Pearson, Head of AI at eflow Global, commented: “In developing PATH AI, we have made a conscious decision not to create just another AI copilot. PATH AI has been engineered to provide regulatory professionals with the contextualised insights that they need to use their expertise as effectively as possible. One of the main criticisms of how AI is being used in a regulatory context is that it creates a ‘black box’ in which decisions cannot be explained or evidenced. Financial institutions must be able to illustrate how they are using AI to prevent market abuse, and that’s what PATH AI enables them to do.”
The launch marks a significant milestone in eflow’s strategic deployment of AI-powered tools, following the successful introduction of its AI-generated risk scoring functionality earlier this year. The approach focuses on empowering compliance professionals with intelligent tools that enhance their expertise whilst maintaining human oversight and regulatory accountability.
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