RegTech in Practice: Defining Boundaries for LLMs and Explainability in Compliance
Innowise_ · reddit · 2026-08-11
The author shares engineering insights from using LLMs in a RegTech project. While converting regulations into training content via LLMs was straightforward, the real bottleneck was explainability and traceability—providing a clear audit trail when asked why a specific training was recommended.
To solve this, the team pivoted to a hybrid pipeline: regulatory mapping → risk identification → evidence retrieval → training recommendation → human review. They concluded that LLMs shouldn't dictate compliance logic alone; they are better suited for retrieval and generation, with deterministic rules and human oversight handling the final decisions.
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