Let’s not sugar-coat it: we’ve entered an era where code makes the calls. Decisions that move markets, shape portfolios, and shift business outcomes are no longer confined to boardrooms—they’re increasingly executed by opaque algorithms operating at machine speed.
The uncomfortable truth? Most firms aren’t remotely prepared.
Just as liquidity cycles rewire asset valuations, AI is quietly redrawing the map of power inside organizations. And if traditional conflicts of interest were hard enough to manage in a human-only world, now imagine them buried inside black-box logic, operating silently until something breaks.
We're not just dealing with new technology. We're dealing with a collapse in transparency.
Using AI? The Rules of Effective Compliance Still Apply
The core problem hasn’t changed: a conflict of interest arises when personal incentives corrupt professional judgment.
That’s been true for decades—think:
Now picture this:
No emails. No paper trails. Just “the model did it.”
Read more about effectively managing Conflicts of Interest.
Here’s the part no one wants to admit: AI scales everything.
Good decisions, bad behavior—doesn’t matter. It just runs faster and deeper.
Let’s break it down:
When AI owns the outcome, responsibility gets fuzzy. Everyone hides behind “the system.”
Models trained on past behaviors can hardwire yesterday’s conflicts into tomorrow’s decisions—indefinitely.
The veneer of objectivity gives cover to deeply subjective inputs. Just because it looks like math doesn’t mean it’s clean.
This isn’t a policy problem. It’s a visibility problem.
And solving it requires rethinking how compliance systems see, learn, and intervene—in real time.
AI & The Compliance Officer: Secret Weapon or Liability?
This shift isn’t just about AI. It’s about opacity.
As systems make more decisions, humans lose the thread—and regulators are watching closely.
The inevitable question is coming:
“Who made this decision? Why? Who stood to gain?”
If the answer is anything close to “we don’t know,” you’ve already lost.
Transparency is the new alpha. And it won’t be optional for much longer.
AI isn’t inching forward—it’s exploding. More data, less friction, tighter feedback loops. The cost of being unprepared isn’t just regulatory—it’s existential.
Conflicts of interest haven’t vanished.
They’ve become faster, smarter, and harder to catch.
And the firms without the ability to detect and mitigate them in real time?
They’re not just exposed—they’re flying blind.
Because in an exponential world,
yesterday’s compliance playbook will be as useful as a floppy disk in a quantum computer.
This post was written by John Kearney, Head of Product for Employee Conflicts of Interest at MCO (MyComplianceOffice).