Artificial Intelligence (AI) is making its presence felt in the professional services sector, particularly among small firms that provide administrative, accounting, audit, and legal support. While these organisations may not yet use large automated systems for AML compliance, individual practitioners are increasingly turning to AI tools for guidance and decision support. This shift, while understandable, introduces a new kind of risk: the temptation to rely too heavily on AI-generated responses for matters that require professional judgement.
Unlike financial institutions equipped with sophisticated transaction monitoring systems, many of these smaller service providers are engaging with AI through general-purpose platforms, sometimes even open-access chatbots, using them to assist in answering client queries or shaping internal compliance decisions. In doing so, some are at risk of overvaluing the output of tools that, while powerful, are not completely reliable and are certainly not tailored for specific regulatory environments or firm-level risk profiles.
A core concern is the false sense of certainty AI responses can produce. These tools often sound authoritative, even when the information provided may be incomplete, outdated, or not jurisdictionally accurate. For example, a lawyer or accountant might consult AI for guidance on when to file a suspicious activity report, only to receive a generic answer that does not account for the local regulatory obligations or the specific nature of the client relationship. This could lead to incorrect decisions, exposing the firm to legal and reputational consequences.
Additionally, AI systems lack context. They do not understand the full history of a client relationship, a firm’s internal policies, or the differences between risks identified in specific industries. In AML compliance, such contextual awareness is often crucial to determine whether behaviour is genuinely suspicious or simply unusual but explainable. Relying on AI to draw those distinctions without human oversight can result in either over-reporting, and therefore wasting resources and possibly harming client trust, or under-reporting, which carries far more serious regulatory risks.
Another risk lies in accountability. When a decision is influenced by an AI-generated suggestion, who is responsible if that decision is later challenged? AI has no liability, no regulatory duty, and no ethical compass. It cannot be held accountable in the way a compliance officer or advisor can. Firms must remain cautious and ensure that all AML decisions, regardless of technological input, are ultimately owned and justified by a qualified human professional.
While AI can support efficiency, by summarising regulations, it should never be treated as a decision-making authority in AML matters. Instead, it is best positioned as an assistant, not a replacement, for professional judgement. As the regulatory environment grows more complex and the scrutiny on professional services firms increases, maintaining clear boundaries between advisory support and compliance decision-making becomes more important than ever.
In conclusion, AI can be a helpful tool in the AML toolkit for small professional service firms. But it is not a silver bullet. Over-reliance on AI, especially in place of properly trained personnel, can result in regulatory missteps and low quality of compliance. The priority should always be sound human judgement, with AI used cautiously and responsibly to support, not substitute, informed decision-making.
MK Compliance can assist small and medium professional service firms with their AML obligations, including the provision of professional advice on existing internal policies and procedures, support with reporting obligations, and outsourced compliance roles.
The content of this article is valid as at the date of its first publication. It is intended to provide a general guide to the subject matter and does not constitute legal advice. We recommend that you seek professional advice on your specific matter before acting on any information provided.
For further information or advice, please contact info@compliancemk.com.
