APPLICATION OF ARTIFICIAL INTELLIGENCE IN REGULATORY COMPLIANCE FOR CROSS-BORDER DIGITAL TRANSACTIONS

Abstract

This study examines the theoretical, structural, and empirical applications of Artificial Intelligence (AI) and Machine Learning (ML) architectures within the domain of regulatory compliance (RegTech) and supervisory technology (SupTech) for cross-border digital transactions. The exponential expansion of cross-border financial flows, real-time payment systems, and decentralized financial instruments has amplified regulatory fragmentation, multi-jurisdictional compliance friction, and sophisticated financial crime typologies. Utilizing institutional economics, information asymmetry theory, and computational compliance modeling, this paper analyzes how advanced algorithmic architectures—specifically Graph Neural Networks (GNNs), Natural Language Processing (NLP), and Federated Learning—optimize anti-money laundering (AML), counter-terrorist financing (CFT), and real-time sanctions screening. The findings demonstrate that shifting from legacy rule-based heuristics to adaptive, privacy-preserving AI frameworks significantly compresses false-positive rates, bridges cross-jurisdictional regulatory disparities, and establishes a dynamic, mathematically rigorous paradigm for global financial integrity.