ArachnysThe banking industry has always been subject to constant compliance changes and requirements; it’s safe to say that these regulatory and legal woes will not be disappearing in the near future.

Since the financial crisis in 2008 the banking sector remains under scrutiny and those at the helm of compliance operations are always under big brother’s watchful eye, despite the increased transparency within financial institutions. The compliance function within the finance sector is constantly expanding and changing. As a result, the Head of Compliance has an increasingly demanding role, due to associated risks and potential for failure. There is an urgency to stay ahead of the game in order to carry out their roles effectively and efficiently. The modern compliance officer needs to be a pantomath within their industry; carrying out continuous monitoring, risk assessments as well as being able to forecast future compliance trends.

The digital landscape is changing at an alarming rate and with it, industries need to adapt and embrace it in order to stay ahead, or at the very least keep their head above water. Technological advancements have had a resounding effect on the compliance function.

Technology has become compliance’s new best friend in recent years; as a result, the Head of Compliance needs to embrace all technological resources available to them in order to remain an industry expert.

Here are just two significant changes to the compliance process as a result of digital advancements:

Big Data

One of the biggest changes to the compliance function as result of technology has been the introduction of larger or ‘big data’ platforms which have dramatically improved the compliance function. Traditional compliance processes have not stood the test of time and advanced technology systems need to be implemented in order to carry out in-depth investigations, leaving no stone unturned. There seems to be a growing fear amongst compliance professionals; that their role will become redundant with the onset of technology.

The integration of technological tools has allowed compliance professionals to excel in their role. The application of big data to the compliance function has resulted in drastic improvements, particularly within the financial industry and other industries which are subject to strict regulatory standards. Big data platforms result in the compliance process becoming much more fine-tuned, leading to increased efficiency and effectiveness.

Developing Structure – Enabling Efficiency

Another major advantage which has resulted from technological advancements is the development of a structured compliance process. This has helped compliance professionals develop and maintain an enhanced process; allowing for total management over compliance operations. By incorporating and utilising technology, the compliance process has becomes faster, easier to manage and now allows for more detail and data to be analysed more efficiently. In short – a structure within the compliance process leads to improved efficiency in the following areas:

  • Compiling Content (including the use of open complex global sources)
  • Rigid Extensible Workflows (structured workflow which can easily be altered based on legislation or regulatory changes)
  • Automation (structuring the process allows for more focused targets/objectives)
  • Usability (ease in training and data accessibility)
  • Language capabilities (worldwide searches as a result of translation functions)

Technology has indeed impacted heavily on the compliance function, however, not all compliance professionals are embracing technology within their role. A recent survey carried out in 2016 by Pinsent Masons revealed that ¼ of compliance professionals interviewed still rely on an entirely manual compliance process; avoiding electronic platforms or automated solutions. It’s hard to believe that in the 21st century professionals are not integrating technology into their process.

It’s safe to stress that technology is about giving people tools to make better decisions, allowing them to spend more of their time adding value to reports, rather than spending time on searching, copying and ordering. The benefits of adding technology to the compliance function certainly outweigh the reasoning behind maintaining a manual process.

So, what future predictions can we expect from technological enhancements? We asked attendees at a recent webinar we held and interestingly, there seems to be more or less an equal measure in predictions within the compliance function, regarding automation in reports, workflow standardisation and software efficiency.

In the future, we can expect to see further technological enhancements within the area of compliance, particularly in tightly monitored industries such as banking and natural resources. However, it’s important to understand that the introduction of these tools will help humans perform compliance processes more efficiently and effectively and that technology is not here to replace them.

Published by Arachnys on 24 May 2016 in Technology