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Technology can turn the burden of regulation and red tape into a tool for good management

Regulators' increased focus on consumer transactions has pushed compliance and risk management to the heart of the financial sector, and many organisations are struggling under the administrative burden this imposes.

Banks and insurers need to store vast amounts of data recording their transactions and this demand has filtered through to third-party advisers too, who face regulatory demands of their own. Those that are not organised are heading for an audit nightmare, and for others the increased costs associated with navigating the red tape come at an extremely unwelcome time – however, technology can come to the rescue and even turn the burden into an advantage.

Regulation across financial services is nothing new, but there are now far greater challenges in reducing the costs associated with being compliant. Years of on-off IT investments, resulting in one system after another, has left many banks and insurers with a complex technology legacy involving different formats across their divisions and functions. The time has come for firms to tackle this challenge and move towards a single platform, offering a credible audit trail with one version of the 'truth' that can allow executives, auditors and regulators to view the full workings of an organisation, simply and efficiently.

Such enterprise information strategies are a step up from enterprise content management (ECM), allowing far more than the simple sharing of documents. With all the information flowing through a company brought together and managed on a single system, executives can use the information hub to oversee activities. This powerful management tool can not only be used to seek efficiencies and innovations, but also to create an automated, easy-to-use framework for regulatory compliance at a grass-roots level. The applications of such a system are endless, but include:

  • Code of Conduct & Ethics Training – Key here is the ability to disseminate policy and procedures from the top down. A digitised system can issue compliance updates automatically to all relevant staff, do regular testing on regulated topics, and even manage workflow to ensure only those who have passed the latest tests and read the most up-to-date documents have access to customers.

  • Customer Complaint Management – All complaints and subsequent investigations must now be recorded, logged and managed to resolution. Sophisticated information hubs not only do this, but will flag any case which is not resolved in an adequate timeframe.

  • Governance, Risk & Compliance – Financial firms now assign considerable resources to keeping track of all the legislative requirements which impact each area of its operations. A information hub system will ensure all documents are up to date and relevant to the jurisdiction a contract is issued in. Strict permission protocols mean that documents such as terms and conditions can only be amended by authorised staff and are automatically attached to contracts.

  • Anti-Money Laundering – This requires the ability to report, track, monitor, action, escalate and report suspicious activity during financial transactions. Automated systems can ensure that all the necessary information is recorded by staff carrying out transactions by refusing to let them progress to completion without the necessary input. It can then be designed to look for patterns and flag suspicions to supervisors.

All of the above require a seamless and joined-up IT environment that can effortlessly access all data and content in a business, providing a detailed transactional audit log. Happily, far from constituting a cost burden, such a system can save money by automating activities, increasing efficiency, while also proving a powerful tool for information management both in terms of risk mitigation and innovation.

 

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Colin Dean

Colin Dean

Director of Digital Transformation UK

Hyland

Member since

09 Apr 2019

Location

London

Blog posts

5

This post is from a series of posts in the group:

Financial Services Regulation

This network is for financial professionals interested in staying up to date on financial services regulation happening anywhere in the world. CFOs, bankers, fund managers, treasurers welcome.


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