AI is moving rapidly into the operating fabric of financial services — and risk, compliance, regulatory reporting, and data teams are all asking the same question: how do we use it safely in a regulated banking environment?
Most existing material sits at one of two extremes: simplified technical tutorials that ignore governance, or high-level governance papers that never show how systems are actually built. This book bridges that gap.
AI for Financial Risk, Compliance and Regulatory Reporting is a practitioner-focused implementation and architecture guide for engineers, data scientists, architects, risk and compliance professionals, model risk managers, and technology leaders who need to understand how AI systems are designed, governed, tested, and operated inside a bank.
The book follows one continuous case study — Avon & Wessex Bank plc (AWB), a fictional £40B UK regional bank — from a £4.1M PRA Section 166 compliance failure through to a fully governed, 23-system AI platform. Across 16 chapters and four parts, you'll build:
Part I — Foundations: generative AI and LLMs, AI agents, RAG and knowledge systems, and the AI governance framework that makes everything else auditable (PRA SS1/23, EU AI Act, DORA).
Part II — Risk domains: credit risk intelligence, market and trading risk, operational risk, liquidity risk, and model risk management for AI/ML systems.
Part III — Compliance and regulatory: regulatory reporting automation (Basel III/IV, CRR3) and AML/KYC financial crime prevention.
Part IV — Enterprise implementation: architecture, MLOps/LLMOps, and data infrastructure, brought together in Chapter 16 as one integrated, end-to-end risk platform.
Every chapter goes beyond proof-of-concept demos to cover what actually matters in a regulated environment: data lineage, access control, human-in-the-loop review, model risk classification, explainability, audit evidence, cost governance, incident management, and monitoring — with fully transparent, illustrative Python code throughout.
This book is educational and informational only, not legal, regulatory, or professional advice, and Avon & Wessex Bank plc is entirely fictional. It's a working reference for anyone who has to design, build, or govern AI systems where auditability matters as much as performance.
