FINRAâs recent focus on artificial intelligence marks a significant moment for US financial regulation, with the organisation accelerating efforts to embed GenAI into its supervisory and compliance ecosystem.
Earlier this year, the regulator unveiled FINRA Forward, a package of initiatives designed to modernise rules, strengthen member firm compliance, and enhance its ability to confront mounting cyber and fraud risks, claims Red Oak.
The programme reflects a broader recognition that traditional regulatory approaches must evolve to meet rising market complexity and technological innovation.
Within this agenda, FINRA president and CEO Robert Cook announced the regulatorâs ambition to integrate GenAI tools across its operations by drawing on its existing infrastructure and decades of experience. The move continues FINRAâs long-running shift towards technology-enabled oversight and signals a future where GenAI will play an increasingly central role in regulatory processes.
FINRA is no stranger to artificial intelligence. The agency is responsible for monitoring trading activity across dozens of exchanges, alternative trading systems, and a large network of market venues. It also carries out cross-market surveillance on behalf of 26 self-regulatory organisations covering 35 equities and options exchanges. According to Cook, the scale of this task eventually outgrew conventional methods, prompting FINRA to turn to AI.
FINRA CEO Robert Cook said, ââŠit became impossible to rely on traditional spreadsheets or similar tools to analyze the relevant data. Thus, for years FINRA has by necessity been developing and employing AI to support its market oversight functions.â The shift enabled analysts to review âhundreds of billions of market events generated each day in search of fraud, manipulation, or other misconduct that can harm investors and marketsâ, transforming a previously unmanageable workload into a sophisticated digital process.
In 2024, FINRA introduced a major step forward with FILLIP, a large language model-based chat tool now used weekly by nearly 40% of its workforce. This GenAI system assists with summarising and analysing documents, identifying changes between regulatory materials, supporting the drafting process, and carrying out risk reviews.
It can also analyse mutual fund and ETF data to support examinations linked to product sales. FINRA believes these capabilities will contribute âmany thousands of hours in annual efficiency gains from staff using the GenAI tools that are already deployed or in development, with more to comeâ through the adoption of additional third-party AI solutions.
For member firms looking to adopt GenAI safely, FINRA offers guidance through Threat Intelligence Products, roundtables, outreach sessions, and conference discussions. The regulator continues to emphasise that supervisory obligations under Rule 3110 remain unchanged regardless of the tools used. As FINRA puts it, âa member firm must have a reasonably designed supervisory system tailored to its business. If a firm is using Gen AI tools as part of its supervisory systemâfor the review of electronic correspondence, for instanceâits policies and procedures should address technology governance, including model risk management, data privacy and integrity, reliability and accuracy of the AI model.â
As regulatory complexity rises, FINRAâs embrace of GenAI reflects both innovation and necessity. While the agency advances its own AI capabilities, many member firms still struggle to identify trustworthy tools amid a crowded, sometimes opaque market. What they require is technology that is purpose-built for complianceâsolutions that apply GenAI responsibly while connecting fragmented workflows into a unified system. In short, firms need a modern compliance connectivity platform.
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