PayPal
Abstract
Generating regulatorily compliant Suspicious Activity Report (SAR) remains a
high-cost, low-scalability bottleneck in Anti-Money Laundering (AML) workflows.
While large language models (LLMs) offer promising fluency, they suffer from
factual hallucination, limited crime typology alignment, and poor
explainability -- posing unacceptable risks in compliance-critical domains.
This paper introduces Co-Investigator AI, an agentic framework optimized to
produce Suspicious Activity Reports (SARs) significantly faster and with
greater accuracy than traditional methods. Drawing inspiration from recent
advances in autonomous agent architectures, such as the AI Co-Scientist, our
approach integrates specialized agents for planning, crime type detection,
external intelligence gathering, and compliance validation. The system features
dynamic memory management, an AI-Privacy Guard layer for sensitive data
handling, and a real-time validation agent employing the Agent-as-a-Judge
paradigm to ensure continuous narrative quality assurance. Human investigators
remain firmly in the loop, empowered to review and refine drafts in a
collaborative workflow that blends AI efficiency with domain expertise. We
demonstrate the versatility of Co-Investigator AI across a range of complex
financial crime scenarios, highlighting its ability to streamline SAR drafting,
align narratives with regulatory expectations, and enable compliance teams to
focus on higher-order analytical work. This approach marks the beginning of a
new era in compliance reporting -- bringing the transformative benefits of AI
agents to the core of regulatory processes and paving the way for scalable,
reliable, and transparent SAR generation.
AI Insights - Agentic AI systems now use MemoryOS to preserve context across SAR drafts.
- RigorLLM and SELF‑GUARD flag hallucinations before report submission.
- Human‑AI interaction guidelines formalize safe review loops in compliance workflows.
- A‑MEM network provides structured episodic memory, boosting crime‑type detection.
- Agent‑as‑a‑Judge mirrors autonomous driving safety checks, ensuring narrative consistency.
- Building Agentic AI Systems (Biswas & Talukdar) offers a framework for finance deployment.
- Future work must address mechanistic gaps to guarantee reliability in high‑stakes compliance.
Abstract
The deployment of capable AI agents raises fresh questions about safety,
human-machine relationships and social coordination. We argue for greater
engagement by scientists, scholars, engineers and policymakers with the
implications of a world increasingly populated by AI agents. We explore key
challenges that must be addressed to ensure that interactions between humans
and agents, and among agents themselves, remain broadly beneficial.