Garri Galanter, Chief Commercial Officer at Salt Edge. Ph.D. in Mathematics.
At the heart of modern finance beats a paradox. Every innovation aimed at speed and efficiency collides with an expanding web of regulation. What was designed to make finance safer often slows it down. This isn’t just a technical dilemma—it’s a philosophical one, reflecting the timeless tension between freedom and control, innovation and stability, speed and security.
Performance Versus Compliance
Financial regulation has reached unprecedented complexity. Every new act, audit and verification adds another layer to an already dense system—a wall separating two realities.
On one side lies productivity: instant transactions, automation and capital fluidity. On the other hand stands compliance: documentation, checks and multilevel approvals. Together, they create a dual world where technology races ahead while bureaucracy holds it back.
This explains a core paradox: Despite vast technological progress, decisions are slower than ever. Payments that could clear in seconds wait weeks for approval. Compliance departments consume ever-growing budgets, and the fear of penalties outweighs the drive to innovate or improve service.
The Hidden Costs Of Compliance
Beyond visible expenses—staff, systems, audits—lie hidden costs: legal delays, documentation loops, abandoned clients and missed opportunities. These inefficiencies ripple through the economy, suppressing growth and innovation.
At its root, the challenge is the absence of mechanisms to reconcile two imperatives: to stay compliant while remaining competitive.
A Garden With Two Gardeners
Imagine a garden tended by two gardeners. Productivity wants open fields, rapid growth and efficient irrigation. Compliance insists on fences, labels and inspection logs. Their conflicting visions create a patchwork—flourishing in parts, stifled in others. This is today’s financial ecosystem: a landscape of innovation fenced by regulation.
Fragmentation As A Symptom
Fragmentation magnifies the paradox. Banks operate on disconnected systems; when APIs exist, they rarely interact. Compliance teams work manually or through isolated tools focused on minimizing risk, while business units chase efficiency independently. The result is a mosaic of processes that cannot communicate—a garden divided by its own structure.
Here, the phrase “In the AI era, everything becomes API” gains deeper meaning. An application programming interface (API) is more than a technical bridge—it’s a framework for coexistence. APIs create a shared language between systems with different goals, enabling freedom within boundaries.
Artificial intelligence adds the ability to process complexity at scale—analyzing massive datasets, detecting patterns and making real-time decisions. Together, AI and APIs form an architecture that can reconcile opposites: integrating regulation and efficiency, oversight and automation.
From Theory To Practice: The Case Of AML/KYC
Nowhere is this balance more critical than in anti-money-laundering (AML) and know-your-customer (KYC) processes. These essential safeguards are notoriously cumbersome. Traditional procedures rely on manual checks, document reviews and lengthy approvals, creating friction, cost and frustration.
AI-driven API integrations can change this dynamic. They can automatically collect and analyze data from multiple sources, assess risks and make compliant decisions in real time. Machine learning can help identify suspicious transactions with greater accuracy, reducing false positives and freeing officers to focus on truly complex cases.
This transformation doesn’t just have the potential to accelerate compliance—it can make it smarter, cheaper and more consistent.
From Processes To Platforms
Automating tasks isn’t enough. True resolution requires an architectural shift—from fragmented processes to integrated platforms. In this model, APIs better ensure standardized connections, while AI acts as the intelligent core, orchestrating complexity and optimizing outcomes.
But the real revolution is cultural. Compliance and productivity must no longer be seen as opposing forces but as complementary parts of a unified system. Compliance should be built into the foundation—an enabler rather than a constraint.
Open Banking: A Glimpse Of Balance
Open banking offers a glimpse of this integration. Built on standardized APIs, it allows financial and nonfinancial entities to share data securely. The EU’s Payment Services Directive 2 and the U.K.’s Open Banking initiative were first steps.
These frameworks show that regulation and innovation can coexist—and even strengthen each other. When openness is structured through APIs, compliance can become a design feature rather than a bottleneck.
A Step Toward Regulatory Evolution
Executive Order 14178 formally recognized the paradox: Regulation, meant to protect, can sometimes be a barrier to innovation. While deregulatory moves bring partial relief and new complexity, they mark a necessary shift in mindset. The system is beginning to diagnose itself.
From Fragmentation To Integration: Practical Steps
Implementing the principle “In the era of AI, everything is API” requires coordinated action:
Organizational. Break down silos between compliance, business and technology. Build cross-functional teams aligning regulatory and commercial goals.
Technological. Create unified platforms integrating AI and APIs for seamless interoperability and compliance by design.
Data. Establish standardized data models and exchange protocols that enable efficient integration while preserving confidentiality.
Regulatory. Shift from rule-based oversight to principle-based frameworks defining outcomes—safety, transparency, consumer protection—while allowing flexible paths to achieve them. RegTech should stand at the center of this evolution.
From Contradiction To Synthesis
The tension between productivity and compliance mirrors a deeper human truth: Progress depends on balancing freedom and order. Such contradictions can’t be erased but can become creative forces.
In dialectical terms, when thesis meets antithesis, synthesis arises. The union of AI and APIs represents that synthesis in finance—a higher state where friction becomes a driver of innovation.
In this architecture, compliance and productivity no longer negate each other. APIs act as the connective tissue—interfaces between technologies and philosophies of control and creativity. AI becomes the mediator, translating complexity into action.
The result is not deregulation but intelligent regulation—systems adaptive enough to evolve and transparent enough to maintain trust.
Conclusion
In the AI era, everything indeed becomes API—technically and philosophically. APIs symbolize structured freedom; AI provides the intelligence to sustain it. Together, they transform compliance from a constraint into a catalyst.
The next generation of financial systems will not be defined by how fast they move or how strictly they comply but by how gracefully they integrate both. When compliance becomes part of the flow, innovation follows—and “no” finally turns into “flow.”
The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
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