Droit introduces explainable AI for regulatory compliance

By Vriti Gothi

Droit has launched Decision Decoder, a generative AI-driven capability designed to provide contextual explanations for regulatory compliance decisions generated by its Adept platform, as financial institutions face growing scrutiny around explainability, auditability, and operational efficiency in compliance workflows.

Droit’s Adept platform is widely used by global financial institutions to operationalise regulatory rules and internal policies across pre- and post-trade environments, processing tens of millions of compliance determinations daily in real time. However, as regulatory logic grows more complex, firms are under pressure not only to make compliant decisions but also to clearly explain how those decisions are reached.

Decision Decoder addresses this challenge by pairing large language models (LLMs) with Droit’s structured regulatory knowledge base. Integrated with Adept and its Logic Viewer, the tool generates human-readable explanations that translate complex decision trees into concise summaries, contextualised against trade data and supported by citations to underlying regulatory texts. This approach aims to reduce the time operational teams spend navigating compliance logic while maintaining traceability.

Unlike generic AI applications, Decision Decoder operates within Droit’s predefined legal and regulatory frameworks. Explanations are generated solely from user inputs and Droit’s curated knowledge models, preserving the same level of auditability and regulatory defensibility as the original Adept decision. This design reflects broader industry concerns around the reliability and governance of AI in regulated environments.

“The Decision Decoder combines the explanatory power of generative AI with Droit’s unique decision logic, bringing greater efficiencies to operations and compliance teams worldwide,” said Brock Arnason, founder and chief executive officer of Droit. “We can now offer financial firms a low-touch tool to enhance comprehension and reduce the administrative burden of compliance.”

Joceline Zheng, Droit’s chief product officer, said, “The product focuses on practical outcomes rather than AI experimentation. The Decision Decoder synthesises the most powerful aspects of LLM-based AI and the Adept platform to deliver meaningful improvements in our clients’ workflows, highlighting the depth of Droit’s regulatory knowledge models.”

The launch underscores a broader shift in the regtech sector, where explainable AI is becoming a critical requirement as institutions seek to balance automation with regulatory accountability.