Can Tech assist compliance groups do extra with much less?
Unfortunately, most organizations are struggling to find the resources to staff their compliance functions with the right number of people.
A recent study found that nearly three-quarters (71 percent) of financial institutions’ compliance departments are facing a cost reduction target, with nearly two-thirds (64 percent) of those targeting budget reductions between 10 and 20 percent over the next three years.
The answer, of course, lies with technology. New and advanced software solutions powered by artificial intelligence, machine learning, and enabled by the internet of things (IoT) and other technologies can provide a way to reduce compliance costs for organizations without necessarily risking non-compliance or spreading current staff too thin.
“Compliance departments need to pivot faster to execute their digital strategies and improve the impact and effectiveness,” explained Accenture Senior MD Steve Culp.
How organizations can drive compliance tech-adoption
There’s no argument that technology can seriously help compliance teams do more with less.
To be honest, AI, ML, and other solutions make it easier for organizations to boost their confidence levels when it comes compliance be it specific compliance tasks mandated by regulations or general compliance mandated by industry best-practices.
However, not all organization might be in a position to adopt a tech-based compliance solution. Not because it’s an expensive proposition, but because like all AI-powered solutions, compliance-tech and regtech solutions typically need a strong data platform to get started.
Further, enterprise-wide compliance isn’t seen as a digital task. Hence, leaders and managers must work on data migration and process upgrades to boost the organization’s digital readiness and prepare it to onboard an end-to-end compliance solution.
In the financial services industry, adopting a compliance platform for intelligent and automated checks and audits is generally simpler as the industry is already quite far ahead in its digital transformation initiatives.
“As financial services clients seek more tailored and instant experiences and the pace of digital innovation accelerates, the approaches to compliance that were formed coming out of the global financial crisis are no longer fit for purpose,” said Accenture’s Culp.
According to their report, compliance operating models must continue to evolve from the post-financial crisis approach.
Responsibilities previously performed by the compliance function such as anti-money laundering and know your customer are becoming more operational tasks, and hence, compliance teams have more room to adjust themselves to manage new risks without disrupting the pace of business.