Regtech in Compliance
RegTech will be the future of compliance technology and is expected to be different from conventional applications in terms of Agility, Speed, Integration and Analytics. On one side it will assist companies in complying with regulations and on the other side it will provide smart data for regulators.
What RegTech can do?
1. Have Centralised Access
A good RegTech system will encompass all areas of compliance across departments, functions across multiple geographical locations. Several RegTech systems have dashboard facilities (can be customised) that will have information and continuous check over the compliance processes.
2. Give “Up-to-date Information”
While globalisation is bringing us closer, it isn’t the case for compliance and regulations. Different jurisdictions follow different rules & the expectations of the regulators are dynamic. Even within a country, different states may have different laws and regulations. For a company that has operations in multiple sites, it is tedious to manually track every region’s regulations. A good RegTech system will have a closely connected communication protocol that ensures transparency. Such a system will be intelligent enough to notify the FIs every time the regulations are updated.
3. Generate bespoke reports - 24/7
Report generation is one of the major bottlenecks that compliance officers face today. To generate a consolidated periodical report, the average time taken is approximately one week. A good RegTech software resolves this issue by providing data organisation, mining and offer customised reports.
4. Do Efficient Audit Trails
An audit trail (also known as audit log) is a security-relevant chronological record that provides evidence of the activities that have affected any specific operation, procedure, or event. RegTech software allows easy and simple scrutinisation of data and reports which enables quick risk identification and problem resolution.
Perhaps, the biggest advantage of deploying a comprehensive RegTech software, is its intelligence and that it goes beyond just reporting. According to a report by Deloitte, “In the short-term RegTech will help firms to automate the more mundane compliance tasks and reduce operational risks associated with meeting compliance and reporting obligations. In the longer term, it will empower compliance functions to make informed risk choices based on data provided insight about the compliance risks it faces and how it mitigates and manages those risks”. With banks and financial institutions having branches across the world, RegTech can deftly operate across multiple-jurisdictions with role based access saving time and money.
Better Stakeholder Value: With effective governance risk and compliance management, a RegTech solution empowers the brand to earn the confidence of stakeholders.
Optimal Risk-Return Outcome: Greater transparency and visibility enables decision makers to undertake initiatives with the most optimal risk-reward outcomes.
Lower Total Cost of Ownership: Integrated corporate governance, risk and compliance management leads to significantly lower costs incurred in deploying such a technology.
Improved Business Performance: Robust compliance management and proactive identification, tracking of risk and resolution of issues lead to better operating performance.
At the pace in which technology is expediting globalisation, compliance functions in a financial company continuously face cyber and corruption risks. In such a demanding environment, a robust compliance/RegTech system will make an important contribution towards increasing profitability and efficiency of financial institutions.
The focus however, needs to shift to promoting a culture which will encourage all staff to take responsibility for doing the right thing all the time. This will reinforce accountability within the business.