To navigate compliance effectively in the 21st century, you need 21st century tools. With new rules and updates coming in frequently, and rising expectations from regulators, sticking with familiar tools that have been on our office computers for over three decades - is no longer the safe option.
In our recent webinar, How to Bring Your Policy Management Process Into the 21st Century, industry experts Freddie Frith, Head of SMB at Clausematch, Adeel Liaqat, Co-founder and Managing Director at NovaVu, Melanie Wright, Director, Strategic Integration, Regulatory Strategy & Delivery, Personal & Commercial Banking at Royal Bank of Canada and Koen Vanderhoydonk, CEO at Blanco Services, sat down with us to discuss how organizations can adapt to new technologies and make compliance an integral part of their firms culture.
Common business tools like Word, Excel, and SharePoint have a justifiable place in organizations, and they will carry on having a place in organizations for the foreseeable future. However, they can also present challenges for specialist functions including compliance, risk governance and audit.
According to Wright, from a financial institution perspective, regulations are becoming more product agnostic. Previously, subject matter experts were focused on specific products and specific business practices, so they had no issue using the available desktop applications to ensure they were complying with regulations. Wright mentioned, “Now with the maturation of the regulations and the growing presence of regulators across the globe, we can no longer rest on the shoulders of a handful of individuals sprinkled throughout the organization. We need to amp it up and have a much broader enterprise view of what's going on, what the connections are and what the requirements are.”
Tools like Microsoft Excel or Google Docs aren’t going to cut it anymore. They don’t have the ability to provide digital taxonomy required to ensure organizations are not only meeting the regulations that exist now, but that they have the capability of meeting the regulations that are coming up in the future.
According to Liaqat, it’s not just the Microsoft and Google products of the world that are causing problems for organizations. Many organizations use in-house solutions that have not adapted to the ever-growing changes in the industry. These older generational tools may have served a purpose five or ten years ago, but they most likely weren’t modernized to meet regulators’ expectations today.
Organizations need to be reactive when it comes to regulations, but they also need to anticipate the regulations that are coming down the line, i.e., be proactive. According to Vanderhoydonk, this becomes challenging when you’re relying on a one-directional tool like Excel because everything is managed individually, the software lacks an element of collaboration and there are no specific capabilities to help compliance teams interpret the current laws and regulations.
The good news is that many RegTech and FinTech vendors have a solution in place to help organizations overcome their compliance challenges. However, they need to ensure the right problems are identified before they select a vendor.
Employees get so inundated with their burdensome, manual daily routine that they are not able to objectively look at what their specific challenges are.
It’s important to first identify the right individuals in the organization who can provide insight into the specific compliance challenges that the company has faced over the years.
These challenges may include:
Once these challenges are identified, you must then understand what you are currently doing from a process standpoint and see if there are any opportunities to streamline some of these tasks to help you reduce costs, improve operations, save administrative time, and respond back to regulators and auditors in a much more effective way.
It may seem overwhelming to start from scratch to identify what solution is right for your organization. Oftentimes, organizations hyper focus on specific buzzwords like “AI” and “Machine Learning” and move forward with a specific solution without truly understanding what it will do for their organization.
Look beyond the buzzwords and focus on these five key factors in your decision-making:
1.) Compile a list of your requirements and what challenges you are trying to solve
While vendors can help guide you on some of the requirements, you should have a general understanding of what exactly you’re trying to solve.
2.) Research the specific technology and solutions that the organization offers
3.) Review the vendor’s standing in the market
4.) Understand the vendor’s support operations and capabilities
5.) Make sure the cost aligns with your budget
Look beyond just the licensing cost of the software and truly understand the total cost of ownership. This encompasses your licensing costs, support costs, and any necessary training costs including implementation.
Once you bring all these five components together, you’ll be well suited to make an informed decision on which tools and technologies will best support your organization’s initiatives.
Stay tuned for Part 2 of our blog series where we’ll cover how to help your organization prove the effectiveness of your compliance programs. For more information, view the full webcast here.