Industries
The EU AI Act defines high-risk AI systems. Companies deploying them don't need more observability – they need legal cover.
AML analyst co-pilots & compliance search
“Your AML analyst closed a case because the AI summary missed a crucial transaction. The regulator wants to see the raw data the AI used.”
Banks aren't letting AI approve loans, but they are using LLM Agents to summarize thousands of transaction logs for human analysts. When the Agent fails and omits a red flag, the human makes a non-compliant decision.
CRITICAL USE CASES
Agents that summarize adverse media and transaction history. When a suspicious pattern is missed, you need proof of exactly what data was retrieved and fed to the context window.
Compliance officers use chatbots to query complex regulations. If the bot hallucinates an exemption that doesn't exist, and the officer acts on it, you need an immutable record of that hallucination.
LLMs generating drafts of Suspicious Activity Reports (SARs). You need to trace the lineage of every claim in that report back to the source document.
AI assistants helping prepare regulatory submissions. Every fact in the filing must be traceable to its source document.
THE RISK
Operational resilience. DORA (Article 12) demands integrity of ICT systems. If you cannot prove why a report was drafted incorrectly (i.e., "The AI didn't retrieve the file"), you face systemic compliance failure. Standard OTEL logs are mutable and don't prove integrity.
THE EVIDENCE
Cynsta captures the OTEL Span of the retrieval tool. We canonicalize (RFC 8785) and hash (SHA-384) the exact JSON payload the Agent received. We prove whether the error was a data failure or a model hallucination.
REGULATORY FRAMEWORK
MARKET EXPOSURE
DORA
Mandatory ICT log integrity by 2025
Audit Risk
Fines for lack of explainability in AML
€35M
or 7% turnover (max fine)
Clinical documentation & triage support
“The AI scribe summarized the patient consult but hallucinated a penicillin allergy. The doctor prescribed based on that note.”
AI isn't diagnosing patients, but it is acting as a "smart scribe" and triage assistant. The liability lies in the integrity of the information transfer from patient to doctor via the LLM.
CRITICAL USE CASES
Agents listening to consults and updating EMRs. You need an immutable diff between the transcript and the AI summary to catch hallucinations during audit.
Patient-facing bots that collect symptoms before a nurse sees them. If the bot fails to escalate a keyword (e.g., "Chest pain"), you need proof of the exact logic path the agent took.
Agents mapping clinical notes to billing codes. Incorrect coding leads to insurance fraud investigations. You need a chain of custody for every code generated.
AI drafting preliminary radiology reports. Every finding must be traceable to the specific image region that triggered it.
THE RISK
Under the EU AI Act and MDR, these are high-risk systems requiring "Robustness and Accuracy." A mutable log file on a server is not evidence in a malpractice suit; it is hearsay.
THE EVIDENCE
Cynsta provides a Qualified Electronic Time Stamp (eIDAS) anchoring the specific version of the prompt and output. We provide a Merkle proof that the log entry regarding the "Penicillin Allergy" existed at time T and has not been altered.
REGULATORY FRAMEWORK
MARKET EXPOSURE
Malpractice
Defending system error vs. user error
Article 15
Robustness and accuracy required
€35M
or 7% turnover (max fine)
Claims intake & document extraction
“Your extraction agent read the police report but failed to parse the 'party at fault' field. The adjuster processed the claim incorrectly.”
Insurers use Agents to structure unstructured data (PDFs, images, emails) so humans can process claims faster. When the extraction fails, the downstream financial decision is flawed.
CRITICAL USE CASES
Agents parsing invoices and police reports. Every parse_document tool call needs to be audited for accuracy and completeness.
Adjusters asking, "Is flood damage covered in this specific rider?" If the RAG system retrieves the wrong rider, the claim decision is wrong.
Chatbots collecting initial accident details. You need a forensic transcript of what the customer actually typed versus how the Agent interpreted it.
AI researching liability and recovery potential. Every source document and conclusion must be traceable.
THE RISK
Bad Faith claims. If a claimant argues that your system systematically ignores certain data points, you need irrefutable proof of your system's execution logic to defend against class actions.
THE EVIDENCE
Cynsta logs the Tool Execution Envelope. We don't just log the result; we log the hash of the input document and the raw output of the parser. We prove the Agent saw the document, establishing the facts of the workflow.
REGULATORY FRAMEWORK
MARKET EXPOSURE
Bad Faith
Proving the system didn't act with bias
Solvency II
Operational risk transparency
Claims Cost
Re-opening claims due to extraction errors
Bias auditing & prompt governance
“A 50-year-old candidate sues for age discrimination. They claim your AI ranked them low on 'Culture Fit' due to their graduation year. Your defense depends on proving exactly what instructions the AI was following.”
HR Agents don't just "read" resumes; they score them based on "Soft Skills" and "Culture Fit." These are black boxes where model bias hides. If the model lowers a score because it sees a graduation date of 1990, you have a disparate impact problem.
CRITICAL USE CASES
Recruiters often tweak system prompts to get "better" results (e.g., adding "look for high energy"). These tweaks can introduce illegal bias. You need an immutable history of Active Prompt Versions to prove the prompt used was the legally approved version.
To pass a Bias Audit, you must run statistical tests on the outputs. You need a guaranteed, tamper-proof dataset of every score generated to prove the Selection Rate didn't violate the 4/5ths rule.
Agents often hallucinate personality traits based on proxies (e.g., assuming a candidate is "rigid" because they worked at a legacy bank). You need the raw Chain of Thought log to see why the Agent assigned a low score.
If a recruiter changes a prompt to "filter for young people," runs a batch, and changes it back, you need proof of that deviation. Cynsta's immutable ledger captures it.
THE RISK
NYC Local Law 144 requires annual impartial bias audits. If you cannot produce a clean, immutable log of Input (Resume) + Instruction (Prompt) + Output (Score), you cannot perform the audit. If a recruiter alters a prompt to introduce bias and deletes the log, the company is liable.
THE EVIDENCE
Cynsta acts as the Configuration Recorder. We log the hash of the System Prompt used for every single inference. You can prove in court: "At 10:00 AM, the system was running Approved Prompt v4.2. The low score was derived from the lack of Python experience, not the graduation date."
REGULATORY FRAMEWORK
MARKET EXPOSURE
NYC 144
Audit failure = fines + lawsuits
4/5ths Rule
EEOC disparate impact threshold
Shadow HR
Unapproved prompts = liability
Due diligence & contract review
“Your AI Associate reviewed 5,000 contracts for a merger. It missed the 'Change of Control' clause in three of them.”
Law firms use Agents to scale document review. The lawyer is responsible for the output. If the Agent fails, the lawyer needs to know if it was a prompting error or a system failure.
CRITICAL USE CASES
Agents iterating through data rooms to flag risks. Every file opened and every flag generated must be logged.
Agents searching case law. Hallucinated citations are a disbarment risk. You need proof of the source text the Agent cited.
Agents tagging documents as "Privileged" or "Responsive." If you withhold a document incorrectly, you face court sanctions.
AI reviewing thousands of documents for M&A. If the AI misses a material clause, malpractice liability follows.
THE RISK
Duty of Competence (ABA Rule 1.1). You must supervise your AI. If you cannot produce an audit trail of what the AI reviewed, you cannot prove supervision.
THE EVIDENCE
Cynsta provides a Certificate of Analysis. We build a hash chain of every document processed. If a log is deleted to hide a missed file, the cryptographic chain breaks, alerting the auditor.
REGULATORY FRAMEWORK
MARKET EXPOSURE
ABA 1.1
Duty of competence over AI
E-Discovery
Court sanctions for errors
Malpractice
Professional liability exposure
Citizen services & case management
“A citizen claims the chatbot gave them the wrong deadline for benefits application. They are suing the agency.”
Public sector agencies use AI to answer FAQ queries and route cases. Transparency is mandatory. You cannot hide behind "black box" vendor logs.
CRITICAL USE CASES
Agents answering questions about taxes, benefits, and voting. Every response is a matter of public record.
Agents reading emails and routing them to the correct department. If an urgent case is dropped, you need to trace why the Agent misclassified it.
Agents helping compile documents for Freedom of Information requests. The search parameters used by the Agent are subject to scrutiny.
AI helping case workers determine eligibility. Every recommendation and its basis must be documented for judicial review.
THE RISK
FOIA (Freedom of Information Act) and Public Trust. Citizens have a right to know how government systems operate. Standard logs stored in a US-cloud bucket may violate data sovereignty laws.
THE EVIDENCE
Cynsta offers Sovereign Evidence. We support Client-Side Encryption (BYOK) and storage in EU-owned clouds (Hetzner/Scaleway). We provide a citizen-verifiable receipt (hash) of the interaction that withstands judicial review.
REGULATORY FRAMEWORK
MARKET EXPOSURE
Judicial Review
Courts demanding AI records
FOIA
Public records of AI decisions
Sovereignty
Data residency requirements
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