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Explainable AI:

How AI can transform due diligence into strategic insight

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Shaun O’Mahony, Chief Technology Officer • May 9 2024

In today’s world, figuring out if we can partner with someone isn’t enough. We need to ask if we should. But it’s easier said than done, as the data to inform that question isn’t all in one place. It’s scattered across different sources, from AML screening to live internet data. 

That’s where AI tools like Xapien come in to automate that end-to-end process. Xapien is a purpose-built tool to make due diligence less of a blocker and more of a seamless, beneficial process. Put simply, it offers lightning-fast, fully automated, in-depth analysis accessible anytime via a straightforward web portal. It isn’t just about speeding things up—it’s about making smarter, more ethical business decisions accessible 24/7.

How Xapien works for due diligence

Xapien is an ensemble of 20 specialised AI models. The system generates advanced screening across millions of registries, data screenings, comprehensive compliance datasets, and trillions of web pages on the indexed internet. 

Unlike other AI solutions, such as ChatGPT, Xapien does not generate misleading or incorrect information—known as hallucinations. Every relevant piece of information is accounted for, fully sourced, and auditable. Our generative AI layer contributes by synthesising and summarising vast amounts of data processed by these models, producing fully-sourced, written reports. 

Other AI models and natural language processing (NLP) tackle really specific, sometimes detailed tasks that are crucial to the compliance workflow, such as pinpointing and differentiating between entities like people or companies that might share the same or similar names in our databases. Known as disambiguation, this is tricky, given the number of common names and aliases, and the way names change form across languages. AI, with NLP, can parse through context, spot patterns, and employ smart matching to ensure you’re zeroing in on the right entity across a range of data sources.

Xapien can also pinpoint red flags in unstructured data, such as news articles, legal filings, or images, that contain compliance-relevant details. It can detect legal issues, financial instability, or connections to sanctioned entities by understanding context, recognizing patterns, and applying intelligent matching strategies. This ensures precise identification and provides compliance-ready data.

Reimagining due diligence at the macro level

This all creates the opportunity to reimagine due diligence at both the micro level—as I’ve described above—and the macro level.

On the macro level, integrating AI into due diligence processes marks a strategic transformation in the way entire workflows can be structured and carried out. 

Imagine due diligence that’s completed in minutes at the very beginning of a partnership. This efficiency means no wasted time or resources on tasks that don’t align with ultimate goals. It’s about streamlining efforts from the get-go, ensuring that every new engagement starts on firm ground.

Compliance teams can manage a greater number of cases without needing to scale up time or resources. When the volume of publicly accessible data is surging and the depth of due diligence required by contemporary regulations and consumer expectations is expanding, this capacity to handle more with less has never been more important.

The business world today is anything but static, with regulations, market dynamics, and geopolitical climates in constant flux. AI-driven systems like Xapien are built to stay in step with this ever-shifting terrain, learning from new information as it becomes available and ensuring that compliance measures are always up to date. Navigating the intricate web of international trade and regulation without AI is incredibly time consuming. 

Finally, AI technologies reduce human error and oversight in the compliance realm. Xapien not only gives businesses expansive, data-driven insights but also sharpens their decision-making, significantly bolstering risk management and mitigation capabilities.

To conclude—Xapien does more than just automate research. It equips compliance teams with vital insights, putting them in a better position to evaluate risks, allocate resources wisely, and forge ahead with compliance strategies that not only meet regulatory demands but also resonate with their company’s core values and objectives.

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