How Grounded APIs Can Fix AI Hallucinations in KYC and Compliance Tools
Large language models (LLMs) like ChatGPT can generate KYC dashboards quickly but are prone to fabricating ownership records, inventing citations, and missing live compliance signals such as WHOIS history or sanctions lists. The core problem is that LLMs predict text from training data rather than accessing real-time, verifiable facts. A proposed solution involves feeding AI agents structured evidence packets from tools like the Portfolio Investigate API, which aggregates WHOIS records, IP geolocation, company registry data, email reputation, and sanctions checks into a single domain dossier. The API returns a risk score, a plain-English verdict, and an endpoint that allows follow-up questions grounded in the actual dossier rather than the model's assumptions. This approach aims to make LLM-powered compliance tools reliable enough for use by professional compliance officers.
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