Wolters Kluwer: Business Intelligence - A Tech Revolution for the Evolution in Compliance
Posted: 2 April 2017 | Source: Wolters Kluwer
Perhaps trying to soften the blow of the extra compliance work, and the recruitment of specialists required to follow such detailed instructions, regulators are telling firms that the added burden will prove to be a boon to them in the long run. Whatever the cost of compliance, authorities are saying, the benefits derived will be greater.
If that makes it seem as though supervisors are suggesting that they can teach financial executives a thing or two about how to manage risk, and business over all, well, they may have a point. The global financial crisis revealed significant shortcomings in the way that many institutions structured their operations that only in the last few years have begun to be addressed. The industry might have gotten there on its own, but if regulators feel the need to provide a nudge, it’s probably understandable.
One consolation for firms confronting this new burden is that they won’t have to go it alone. As new regulatory requirements come into effect, technology is emerging to ease compliance with them. One of the more promising developments is RegTech – an amalgamation of regulation and technology which is a niche carved out of the better-known assemblage of hardware, software and accompanying services known collectively as FinTech.
RegTech is devoted exclusively to compliance and related issues, such as risk analysis and management. One of the more promising features of the technology, which often can be configured to work with existing systems, adherents say, is that it will be able to learn and adapt. That capability is more for tomorrow than today, but if the systems work as advertised, they should keep institutions ahead of the game by allowing them to keep track of, and adjust to, new rules as soon as they are implemented, and with minimal added expenditure of human time and effort.