Embedded Insurance, AI, and the Compliance Gap
- Steve Marshall
- Jul 21
- 1 min read
As published in Finextra.
Steve Marshall, Director of Advisory Services at FinScan, explores how insurers are racing to integrate AI-driven embedded insurance into digital platforms to meet modern customer demands for speed and convenience. However, this drive towards automation has exposed a widening compliance gap—particularly around AML/KYC, sanctions screening, and data silos—that many carriers struggle to close. He argues that explainable AI and robust model governance are essential to identify hidden risks, such as cross-border activity and politically exposed persons (PEPs), yet fragmented legacy systems and siloed data still impede compliance efforts. The embedded insurance model exacerbates these challenges by limiting data visibility, making real-time risk assessment harder.
Steve recommends that insurers consolidate their compliance tech—creating centralized platforms that offer real-time AML, KYC, and sanctions screening across all lines of business. With integrated data and continuous model validation, firms can support dynamic risk scoring and meet regulatory obligations without sacrificing the seamless user experience customers expect.
