What is KlarvoEngine?

KlarvoEngine is Klarvo's regulatory intelligence engine. It analyses your AI system through a 3-pass classification pipeline and produces an article-cited compliance memo with obligations, deadlines, and recommended controls — in under 60 seconds.

What is the EU AI Act?

The EU AI Act (Regulation 2024/1689) is the world's first comprehensive AI regulation. It classifies AI systems by risk level and imposes obligations on providers and deployers of AI systems operating in the EU.

Any organisation that provides or deploys AI systems affecting people in the EU — regardless of where the organisation is based. This includes websites with AI chatbots, companies using AI analytics, and businesses integrating AI models into their products.

Prohibited AI practices have been enforceable since February 2025. GPAI model obligations since August 2025. Article 50 transparency and most remaining obligations apply from August 2, 2026.

What are the penalties?

Up to €35 million or 7% of global turnover for prohibited practices. Up to €15 million or 3% for transparency and other violations. For SMEs, the penalty is whichever amount is lower.

FINANCIAL SERVICES

Credit scoring AI is high-risk. Insurance pricing AI is high-risk. Are you ready?

Financial services AI falls under Annex III Domain 5 — access to essential services. KlarvoEngine classifies your systems against both the AI Act and sector-specific regulation (MiFID II, DORA, CRD).

Classify your financial AI systems

How KlarvoEngine classifies financial AI

AI System	Classification	Why
Credit Scoring	HIGH-RISK	Annex III Domain 5(b) — creditworthiness
Insurance Risk Pricing	HIGH-RISK	Annex III Domain 5(b) — insurance access
Fraud Detection	MINIMAL RISK	Internal security, no access decisions
KYC/Onboarding	HIGH-RISK	Determines access to financial services
Robo-Advisory	LIMITED RISK	AI Act limited, but MiFID II suitability applies
Algorithmic Trading	CASE-BY-CASE	Rule-based = not AI. ML-based = assess
AML Screening	MINIMAL RISK	Internal compliance tool
Debt Collection Scoring	HIGH-RISK	Affects financial wellbeing
Customer Chatbot	LIMITED RISK	Article 50(1) disclosure

The AI Act doesn't exist in isolation

KlarvoEngine's financial services framework maps obligations across:

MiFID II

Suitability requirements for AI-driven investment advice. The AI Act adds transparency and oversight requirements on top.

DORA

Digital Operational Resilience Act requires resilience testing for critical ICT — including AI systems. Applies from January 2025.

CRD IV / Basel

Model risk management requirements for AI credit models. Existing validation requirements plus new AI Act obligations.

Consumer Credit Directive

Specific explainability requirements for credit decisions that may exceed AI Act minimums.

Your obligations as a deployer

Human Oversight (Article 14)

Credit decisions must have meaningful human review. The person must understand the system and have authority to override.

FRIA (Article 27)

Mandatory for credit scoring and insurance pricing AI. KlarvoEngine pre-fills from classification data.

Logging (Article 12)

Retain logs for at least 6 months. Credit decisions require full traceability for supervisory review.

Transparency to Applicants

Inform individuals when AI influences credit or insurance decisions. GDPR Article 22 also applies.

Non-Discrimination Monitoring

Monitor for bias across protected characteristics. Financial regulators expect ongoing testing.

Frequently Asked Questions

Is credit scoring AI high-risk under the EU AI Act?

Yes. AI systems used to evaluate creditworthiness are explicitly listed in Annex III Domain 5(b) as high-risk, requiring full compliance with deployer obligations under Article 26.

How does DORA interact with the EU AI Act?

DORA and the AI Act are complementary. DORA focuses on ICT risk management and operational resilience while the AI Act addresses AI-specific risks. Financial services firms need to comply with both.

What about robo-advisors?

Robo-advisors are typically limited risk under the AI Act but fall under MiFID II suitability requirements. KlarvoEngine maps obligations across both frameworks.

When do these obligations apply?

Most obligations apply from 2 August 2026, but prohibited practices and AI literacy requirements applied from 2 February 2025. Credit scoring and insurance AI should prepare now.

Prepare your financial services for compliance.

KlarvoEngine classifies credit scoring, insurance, and financial AI with article-level precision. Free to start.

Start free See pricing

No credit card

Free plan forever

Upgrade anytime