Managing compliance and risk are crucial factors for every B2B firm, as they protect trust, revenue, and long-term competitiveness.
In an environment where complex, regulated, and high-stakes transactions are involved, staying compliant and risk-free is more than mandatory.
Therefore, B2B companies are busy building proactive strategies for compliance and risk management. However, handling a large volume of regulatory compliance requirements, emerging data, contracts, and complex third-party risks with human oversight is next to impossible.
It takes a lot of time, resources, and expertise to perform the compliance and risk management tasks effectively.
That’s where Generative AI steps in to manage compliance and mitigate risks, which are essential in modern B2B business environments.
If you’re wondering how GenAI helps B2B firms to manage compliance and risk more efficiently, keep reading this article till the end.
Before diving into the details, it’s crucial to understand the role Generative AI plays in managing B2B regulatory compliance and potential risks.
Ready to dive in? Let’s get started!
What is the Role of Generative AI in B2B Compliance and Risk Management?
We are familiar with Generative AI, also known as GenAI, which is an artificial intelligence that can generate original content such as text, image, video, audio, and code based on human input or prompts.
The role of Generative AI in B2B compliance and risk management is like the immune system of an organization. It helps security and compliance teams detect and fight unseen regulatory risk by:
- Automating repetitive tasks such as compliance audits and document analysis
- Delivering insights and advanced analytics to relevant compliance officers
- Translating complex regulations into simple language through NLPs (Natural Language Processing)
- Providing real-time support through virtual assistants or chatbots
- Simplifying compliance document creation and reporting
- Identifying and mitigating compliance risks using predictive analytics
It makes the compliance teams’ work easier by managing emergency regulatory policies and mitigating potential threats.
Generative AI is no longer a trend for compliance teams; It has become a practical tool that security officers use in their everyday workflow.
A recent study by Deloitte reveals that 67% of businesses are investing in GenAI due to its competence in regulatory compliance operations.
In short, for B2B companies that are worried about compliance policies and struggling to manage risks, generative AI is the one-stop solution.
How B2B Firms Can Use GenAI to Manage Compliance and Risk
B2B businesses can use generative AI to scan unstructured data, detect issues, suggest actionable fixes, and document everything across teams.
This helps security officers to take necessary actions against emerging compliance changes and potential risks associated with them.
GenAI can be used by B2B companies for:
1. Regulatory Policies and Changes Management
Regulatory compliances are complex and continuously changes across industries and geographical regions.
The generative AI constantly scans new laws and regulatory guidelines from external sources. It translates these complex standards into simple and business-friendly language.
Then, it maps these emerging regulation policies into the B2B companies’ existing internal policies and processes.
By doing so, it highlights the gap and informs compliance officers that.
- What are the emerging regulatory and compliance changes?
- How can legal or security teams implement it?
With the help of GenAI, B2B regulatory compliance teams can:
- Save time required for manual legal research
- Initiate faster compliance updates, and
- Avoid risks of non-compliance
2. Policy Making and Control Management
Drafting and maintaining compliance policy can be an overwhelming task for legal teams.
Generative AI makes all these tasks effortless. It drafts, reviews, and manages compliance policies according to industry standards. It identifies gaps in regulatory compliance and harmonizes policies across regions and industries.
GenAI also simplifies the policies for non-legal audiences and consistently focuses on governing policy control. This allows compliance officers to reduce manual efforts in policy-making.
3. Contract Risk and Clause Management
B2B companies handle large volumes of contracts with operational, financial, and compliance risks. And the generative AI moves mountains in managing all the contract-related risks and hidden clauses for decision making heads.
GenAI finds the key clauses and obligations present in the contracts. Comparing the contracts against standard regulations, it signals the non-regulatory and risky terms. It also tracks the ongoing contractual obligations, which helps the financial and procurement heads to make smart decisions.
As a result, B2B teams encounter the following:
- Fewer policy breaches in contracts
- Close deals faster with controlled compliance risks, and
- Avoid legal reviews and bottlenecks
4. Data Security and Compliance Management
A B2B company that fails to implement data privacy compliances end up facing repercussions like hefty fines and a bad reputation.
Generative AI detects and signals to B2B teams the risk of using non-consented or non-compliant customers’ data for their marketing and sales outreach. It flags the customer’s data with missing, unclear, or contradictory consent signals.
It interprets privacy laws, such as GDPR, CAN-SPAM Act, and e-Privacy, into practical rules. Generative AI also classifies contacts based on legal bias, including:
- Consent
- Genuine interest, and
- Unknown
GenAI enlightens the B2B marketing and sales team on whether the outreach is permitted by purpose, job roles, channel, or region.
As a result, the B2B sales and marketing team can –
- Identify and avoid risky customer data quickly
- Prevent accidental or intentional data privacy violation
- Manage data compliance policy across teams
- Launch safe and regulated campaigns
- Avoid spam-related issues and reputational damage
5. Third-Party Risk and Supply Chain Management
Managing compliance risks from partners and vendors is essential in B2B, especially where high-value transactions are involved.
Generative AI analyzes suppliers’ documents, certifications, and ESG reports. It signals adverse news, sanctions, and reputation risks of third-party vendors to the legal and procurement authorities.
Additionally, through automated analysis, GenAI supports due diligence and questionnaires before signing the contracts.
Utilizing GenAI, B2B businesses can be able to accomplish the following:
- Detect suppliers’ issues
- Assess third-party risks
- Reduce manual due diligence efforts, and
- Mitigate procurement fraud and scams
6. Incident and Regulatory Response Management
Generative AI quickly responds to compliance breaches, data leakage incidents, and regulatory inquiries. By automating Suspicious Activity Reports (SARs) and compliance reports, GenAI guides intent classification and severity assessment to compliance officers.
By drafting regulatory notifications and customer communications, GenAI ensures your business partners and internal staff are aware of red flags or signals during an event of data breach.
Through faster and more consistent responses, GenAI helps legal and compliance teams to avoid regulatory penalties and repercussions. It also provides better documentation for compliance officers to safeguard their internal security operations.
7. Enterprise Risk Management and Reporting
It is very hard for B2B enterprises to maintain siloed risk signals across the organization. The inability to evaluate and manage business risks can lead to financial, legal, and reputational damage to a company.
However, GenAI unifies the risk management across the teams by gathering structured and unstructured risk data. It detects trends and emerging threats and alerts concerned executives for proactive management.
As a result, B2B firms can make informed decisions and take effective measures for risk management.
What are the Future Trends of Generative AI in Managing B2B Compliance & Risk?
B2B businesses are time-sensitive and involve large transactions. Integrating advanced compliance and risk management tools is a must-have. Therefore, the use of this technology will increase in the future.
Here are the upcoming trends of generative AI in compliance and risk management –
- Enhanced Automation
Use of generative AI to automate repetitive tasks such as compliance reporting, policy making, and document creation will increase in practice.
- Effective Risk, Compliance Management
GenAI will take the compliance and risk management for B2B businesses to the next level through predictive analytics and scenario simulations.
- AI-based Regulatory Intelligence
From monitoring emerging global regulatory updates to suggesting realistic fixes to B2B firms on upcoming compliance changes, GenAI will take care of everything.
- Human and AI Collaboration
The compliance officers will use AI to make complex decisions and improve GRC (Governance, Regulatory, and Compliance) frameworks in the near future.
Conclusion
To sum it up, GenAI acts as the “main character” in managing compliance and risks for B2B firms, and this is indeed true. From compliance reporting and document creation to interpreting complex guidelines into simple languages (even multilingual) and mitigating risks, GenAI plays a vital role.
Soon, every B2B company will start implementing GenAI to manage compliance and risk. With the rise of new regulatory changes and emerging risks, it is expected that all legal and compliance teams will adopt generative AI solutions for a smooth compliance workflow.
Ready to take your compliance and risk management to the next level? Get started with generative AI solutions today!
