Clausematch releases the results of a recent industry survey: 10 Trends Impacting Compliance technology in 2022
Although Covid came and changed the way we live and work over the past 24 months, for those working in compliance, it meant the introduction of more laws, rules and regulations. With these additions, compliance teams continue to face more regulations that need to be discussed, analyzed and implemented. It is also forecasted that the demand for technology will continue to grow which will require the use of automation and Artificial Intelligence to keep up.
In response to the increased demands on technology and the upcoming RegTech revolution, Clausematch set out their top compliance technology trends expected for this year, based on the industry survey.
Findings from the report revealed the following key developments:
- The need for compliance has increased drastically over the past number of months but the implementation of RegTech and ensuring compliance will give an organization an advantage against competitors as the business and customers are protected from data breaches.
- Regulation is expected to be introduced to cryptocurrency activities due to the increased threat of money laundering through digital assets. A roadmap to provide greater clarity on rules and regulations around cryptocurrency has been announced by The Federal Reserve.
- Increased push for collaboration has led to a stronger desire to interrogate Governance, Risk and Compliance systems (GRC). With this increased push, there has been a major trend of market consolidation. When collaboration takes place, and harmonization is ensured, regulators and RegTech firms can work together.
- In 2022, compliance teams are forecasted to laser-focus on obtaining only the best, trusted data. Now that there is an abundance of data, unlike previous years, it becomes important to be crystal clear on what kind of data is needed: what data is accurate, meaningful, purposeful. Whether the collected data can speak not only about the past but also about the future. It is also about the synchronization of silos, i.e. finding a better way to connect the dots.
- There will be a further need to implement InfoSec beyond just the organization as there is an increase in outsourcing and risk. With this, there is an expected 33% increase in businesses prioritizing RegTech in their 2022 budgets, while 42% state budgets will stay the same. Increased risk means increased fines, Amazon received a massive GDPR fine of €746 million in July 2021, followed by WhatsApp receiving a €225 million GDPR fine months later.
- The introduction of ESG regulations results in the need for increased RegTech due to ESG sanctions being put on organizations and suppliers. Especially with the ever-changing regulations around ESG, it’ll be required to invest in technology to keep up with demand.
- KYC and AML regulation is being introduced to cryptocurrency, especially due to the increasing incidents of money laundering through cryptocurrency. Along with this, there will be more information being provided, resulting in increased clarity between regulators and organizations.
The overarching consensus from this report found that in a world of changing regulation, increasing technology and increased risk, there is a need for collaboration, regulation and innovation to ensure all parties are able to work together to ensure compliance is met.
With these additional concerns being brought to the forefront, it is also clear that regulatory technology companies, like Clausematch, will be required to keep up with demand through expansion or increasing of facilities, the introduction of Artificial Intelligence which may be the way forward as it can improve aspects such as horizon scanning.
Increasing concerns surrounding compliance in 2022 will result in the added requirement for transparency and clarity around the topic of RegTech. The basic understanding of RegTech is that its solutions should allow an organization to trust the output of RegTech solutions, allowing organizations to use RegTech in strategic decision making.
As mentioned previously, RegTech will likely give a competitive advantage to organizations, but the increased need for communication, transparency and clarity between regulatory bodies and organizations will be required.
Listen to the recording of the webinar presenting the findings.
Download the eBook with the 10 compliance trends 2022