Republic Bank of Chicago taps Kobalt Labs for compliance overhaul

Republic Bank of Chicago has chosen Kobalt Labs to modernize third-party risk and compliance work, starting with vendor management and annual policy reviews. The bank expects the rollout to cut review times by up to 80% and expand into fintech partner diligence and marketing collateral checks.

Why it matters: - Republic Bank of Chicago is moving core compliance work from manual processes to AI-assisted workflows. - The shift is designed to improve risk visibility, consistency and documentation as vendor and fintech oversight gets more complex. - Republic Bank expects the new system to cut cycle times for some review and diligence tasks by up to 80%.

What happened: - Republic Bank of Chicago selected Kobalt Labs to streamline back office compliance workflows. - The initial deployment will replace Republic Bank’s current vendor management software. - The rollout will automate the bank’s annual policy review process. - Republic Bank said the platform will go live in summer 2026. - The bank also plans to expand use of Kobalt into fintech partner diligence and marketing collateral review.

The details: - Kobalt Labs is an AI-native compliance platform built for financial institutions. - The bank expects the platform to manage the full vendor lifecycle, from onboarding to offboarding. - The workflow will include document intake, automated control extraction and validation, and automated risk memos. - The review scope covers financial, compliance and information security risk areas. - Republic Bank chose Kobalt after testing multiple options for scalable execution across several risk and compliance workflows. - Kobalt’s features include AI-enabled evidence extraction, automated control identification, gap analysis and risk memo generation. - Republic Bank said Kobalt produced faster and more rigorous results than manual processes and competing tools. - The bank also cited Kobalt’s fit for community banking, regulatory expectations and lean risk teams. - Kobalt has the endorsement of the Alloy Labs Consortium. - Republic Bank is a member of Alloy Labs. - Other member banks using Kobalt include Emprise Bank, Core Bank and Lincoln Savings Bank. - Republic Bank is also making other investments to keep its risk and compliance function aligned with rising workload and complexity. - Republic Bank of Chicago serves communities across Chicagoland. - The bank offers commercial and consumer services, including business lending, treasury management, personal banking and digital banking solutions. - Kobalt Labs says its platform helps teams remove manual steps from third-party reviews of vendors and fintech partners. - Kobalt Labs says the platform is synced to evolving state and federal regulations.

Between the lines: - The deal shows community banks are still under pressure to do more third-party risk work with leaner teams. - Republic Bank’s focus on defensible documentation suggests exam readiness remains a major driver of compliance technology spending. - The partnership also signals that fintech partner oversight is becoming a standard part of bank risk programs, not a side task. - Jason Henrichs, founder and CEO of Alloy Labs, said member banks are rethinking how risk and compliance work gets done and that Kobalt has helped reduce manual effort and improve exam preparedness. - Madhu Reddy, EVP and chief information officer at Republic Bank of Chicago, said AI should strengthen control quality and decision support rather than replace expert judgment.

What’s next: - Republic Bank will begin with vendor management and annual policy review automation. - The bank will then extend Kobalt into broader third-party and partner diligence workflows. - Summer 2026 is the expected go-live window for the platform. - The rollout will serve as part of Republic Bank’s broader effort to scale its compliance program as obligations grow.

The bottom line: - Republic Bank of Chicago is betting AI can make compliance faster without reducing control over critical risk decisions. - If the rollout performs as expected, the bank will have a more scalable model for third-party risk oversight across the vendor lifecycle.