AI-driven regulatory risk assessment is transforming compliance by identifying potential risks and ensuring adherence to financial regulations in forex trading. AI systems analyze vast amounts of market data, trading activities, and regulatory frameworks to detect non-compliance risks, suspicious transactions, and policy violations in real time. Machine learning algorithms assess historical trends and evolving regulations to predict potential compliance issues before they occur. Natural Language Processing (NLP) helps AI monitor regulatory updates, financial news, and legal documents, ensuring that traders and institutions stay informed about the latest compliance requirements. AI also automates reporting and risk evaluation, reducing manual effort and improving accuracy. Regulatory bodies and financial firms use AI-powered risk assessment tools to enhance transparency, prevent fraud, and mitigate financial risks. However, human oversight is still necessary to interpret AI-generated insights and ensure ethical decision-making. By integrating AI into regulatory risk assessment, forex markets become more secure, efficient, and compliant, reducing the chances of legal penalties and financial instability.