NLP-based Regulatory Compliance -- Using GPT 4.0 to Decode Regulatory Documents

Abstract: LLMs such as GPT-4.0 have shown significant promise in addressing the semantic complexities of regulatory documents, particularly in detecting inconsistencies and contradictions. This study evaluates GPT-4.0's ability to identify conflicts within regulatory requirements by analyzing a curated corpus with artificially injected ambiguities and contradictions, designed in collaboration with architects and compliance engineers. Using metrics such as precision, recall, and F1 score, the experiment demonstrates GPT-4.0's effectiveness in detecting inconsistencies, with findings validated by human experts. The results highlight the potential of LLMs to enhance regulatory compliance processes, though further testing with larger datasets and domain-specific fine-tuning is needed to maximize accuracy and practical applicability. Future work will explore automated conflict resolution and real-world implementation through pilot projects with industry partners.