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CTRAG: An In-Context Retrieval-based Framework for Automated Compliance Checking using LLMs

Trust is fundamental in modern regulatory ecosystems, and compliance checking plays a critical role in fostering that trust. Regulatory compliance verificati...

Muhammad Roman·Aug 3, 2026·2 min read·Original source ↗
CTRAG: An In-Context Retrieval-based Framework for Automated Compliance Checking using LLMs

CTRAG: An In-Context Retrieval-based Framework for Automated Compliance Checking using LLMs2608.02472AuthorsMuhammad Roman,Karen Rafferty,Barry DevereuxAbstractTrust is fundamental in modern regulatory ecosystems, and compliance checking plays a critical role in fostering that trust. Regulatory compliance verification is essential for businesses operating in highly controlled environments, as it ensures alignment with sector-specific guidelines across domains such as financial reporting, data privacy, and cybersecurity. Manual compliance testing, however, is often time-intensive and prone to inconsistencies, particularly when compliance depends indirectly on third-party services such as cloud providers, where vendors rely on external providers to meet regulatory standards. In this paper, we present CTRAG, a novel Retrieval-Augmented Generation (RAG) pipeline designed for automated compliance checking. CTRAG employs advanced strategies, including adaptive chunking, dynamic retrieval configurations, and in-context learning, to improve the precision and relevance of compliance assessments. By extracting control questions from regulatory texts and cross-referencing them with unstructured company documentation, CTRAG achieves highly accurate, document-informed compliance verification, even in cases of indirect compliance through third-party services. Empirical evaluations demonstrate significant improvements, with CTRAG achieving an F1-score of 78% and a recall of 85% in the final deployed configuration, ensuring minimal missed non-compliance cases while reducing manual reviewer effort in a real-world deployment. To validate CTRAG value, we developed and deployed a POC within a Big Four professional services firm, applying it to real-world cases and cross-checking results against manual compliance reports. These findings highlight CTRAG potential to streamline compliance workflows, mitigate risks, and enhance regulatory trust in complex, high-stakes environments.ResourcesView on Hugging FaceRead PDFArXiv

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