About France Post-Marché (FPM)
France Post-Marché (formerly AFTI), established in 1990, is a professional association uniting financial and banking professionals involved in activities related to financial instruments. As a member of FPM, SLIB actively participates in various working groups to foster innovation and address challenges within the industry.
One such initiative is spearheaded by the Innovation & New Technologies working group. SLIB has proposed a groundbreaking solution leveraging artificial intelligence (AI) to simplify and enhance regulatory monitoring for banking and financial activities.
The Challenges of Regulatory Monitoring
The financial industry’s regulatory landscape is complex and constantly evolving, posing significant challenges for compliance and legal teams. These teams must navigate intricate regulations, anticipate changes, and assess their impact on operations. SLIB’s initiative aims to:
- Streamline access to regulatory knowledge by consolidating various sources and publications into a single, interpretable repository.
- Provide synthesized summaries, key points, and comparisons of regulatory versions.
- Aggregate diverse regulatory sources (e.g., regulations, RTS, Q&A documents).
- Support organizations in responding to consultations.
- Cross-reference regulations with internal procedures and data.
The Proposed Solution
SLIB’s solution centers on building a scalable and secure AI-powered ecosystem for regulatory monitoring. Key components include:
- AI Environment: Utilizing OpenAI capabilities via Microsoft Azure’s banking-grade secure infrastructure.
- Data Ingestion and Learning: Collecting, preparing, and maintaining diverse data sources for AI training.
- User Interaction: Providing an intuitive conversational interface and OpenAPI service.
- Data Integration: Adding new data sources, including private documents from member organizations.
- Access and Rights Management: Ensuring robust classification and secure access.
- Cost Optimization: Managing billing and consumption efficiently.
Data Sources
The solution integrates public regulatory sources such as ESMA, ECB, AMF, and ACPR, along with publications from professional organizations like AFME and FPM. It also offers options for incorporating private data from member institutions.
Proof of Concept (POC)
With FPM’s approval, SLIB launched a Proof of Concept (POC) to validate the solution’s feasibility and benefits. The POC focuses on:
- Delivering a Minimum Viable Product (MVP).
- Covering regulatory data related to CSDR (Levels I, II, and III) and other referenced Level I regulations.
- Utilizing public documents in French.
Technical Architecture
The solution is built on a Retrieval-Augmented Generation (RAG) framework. This modern approach customizes a large language model (LLM) without altering its core state, instead appending relevant context to queries. The RAG architecture comprises two main pipelines:
- Data Ingestion:
- Documents are segmented into smaller chunks enriched with metadata to enhance retrieval.
- These chunks are vectorized using advanced embedding models and stored in a vector database for efficient access.
- Orchestrator:
- User queries, submitted via a frontend portal, are analyzed and matched with relevant data from the vector database.
- The LLM generates responses based on retrieved information, ensuring contextually accurate and up-to-date answers.
Advanced Techniques
- Segmentation: Recursive segmentation ensures semantic coherence within chunks.
- Embedding Models: Leveraging the text-embedding-3-large model for multilingual capabilities.
- Prompt Engineering: Tailoring prompts for clarity and precision.
- Hybrid Search: Combining text and vector similarity for robust retrieval.
- Intent Classification: Optimizing response paths based on user intent.
Benefits of the Solution
SLIB’s initiative delivers:
- Shared Resources: Enabling cost-effective and collaborative use of AI capabilities.
- Execution Speed: Accelerating regulatory monitoring processes.
- Governance and Sustainability: Ensuring centralized data management for better compliance.
- Collective Intelligence: Enhancing industry-wide knowledge sharing.
- Environmental Impact: Reducing duplication of data storage.
Next Steps
SLIB plans to make the solution available to FPM members in early 2025, enabling them to evaluate its potential benefits. This experimentation will provide critical insights into how AI can revolutionize regulatory monitoring and compliance in the financial sector.
By embracing generative AI, SLIB and FPM are paving the way for a smarter, more efficient approach to regulatory challenges, reinforcing their commitment to innovation and industry leadership.
