2026-01-16 Return to Briefing

Governed AI Compliance (EU AI Act)

Governed AI Compliance (EU AI Act)

Regulatory frameworks like the EU AI Act (effective Aug 2026) and OSFI E-23 are making governed, specialized AI mandatory. General-purpose LLMs are being replaced by domain-specific models for high-risk financial tasks.

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The transition from principles-based guidance to prescriptive enforcement is here. Penalties up to 7% of global revenue drive the need for conformity assessments, transparency, and fairness metrics. Specialized models like FinLoRA are outperforming general LLMs by 40+ points in financial NLP tasks.