With the finance industry adversely affected by exogenous global events, financial institutions (FIs) need to re-examine how they see regulatory compliance management.
Long perceived as an inefficient process, compliance management has the potential to offer tremendous value to FIs by helping them navigate risks and prevent costly fines, provided that they are aligned with corporate goals.
However, to accomplish this, FIs need to reassess how they perceive compliance and use RegTech platforms in a well-thought-out manner.
While there are several useful RegTech platforms or regulatory advisory solutions, we will focus on one platform: regulatory horizon scanning. This platform captures the latest regulatory updates from different institutions and sends them directly to the compliance team.
When used properly, this solution can streamline their compliance processes and do a much better job of incorporating regulation into your corporate goals, turning them into a more value-oriented function.
Directing regulatory horizon scanning towards corporate goals
Integrate compliance into corporate initiatives
Aligning compliance with corporate goals requires a shift in perception towards regulation. Compliance was previously seen as a backend office department that would stifle innovation and development. This perception meant that several financial experts were reticent to seek out the expertise of compliance experts when establishing corporate goals.
However, leading firms are starting to challenge this perception. By leveraging RegTech technology, such as regulatory horizon scanning, FIs are changing their perception of financial regulation by using it as a weapon to accomplish corporate goals rather than a liability.
With the additional insight from the horizon scanning tool, FIs can streamline and minimise compliance risks, paving a simple, more efficient path toward business goals. In fact, the insight into regulatory updates creates a powerful reason for further integrating compliance into corporate goals instead of treating them like a completely separate process.
Maximize time-to-value in RegTech
RegTech investments require some degree of assurance; business stakeholders want to know that any tech investment generates sufficient ROI within a tight window.
With the need to generate ROI quickly, compliance teams need to prioritise time-to-value to realize the value of the platform as quickly as possible, which requires a strategy to deploy the platform across complex financial processes.
Deploying solutions can be a challenge, for many feel that the best way to resolve an issue at hand is to deploy multiple applications at once. However, such a process is far too complicated to manage efficiently.
Instead, the best solution is to identify a significant pain point within the organisation and implement a RegTech solution that addresses the problem. By resolving one problem, it becomes easier to trace the progress.
This is where regulatory horizon scanning holds a tremendous advantage for financial organisations because it offers great value to financial institutions by streamlining the process.
Direct risk and compliance toward growth areas
Financial markets are subject to external developments, which have been detrimental to the industry’s growth. Between the disruption of blockchain and the ensuing war in Easter Europe, the finance industry has suffered significant hits to its growth and development.
Amidst such a turbulent environment, financial organisations need to reassess their perspective on compliance. Rather than seeing it as an unnecessary process that drives up costs and delays innovation, compliance management should instead be seen as a tool to foster growth and innovation.
Regulatory teams can take the lead on corporate initiatives for growth and expansion by helping business units identify and navigate compliance risks to increase their chance of being hit by a penalty and foster innovation.
This would allow organisations to unlock the true potential of compliance management while also aligning it with corporate goals.
Turning financial compliance into a profitable, value-oriented process
Compliance management was seen as an inefficient function that increased operational costs and undermined efficiency. However, with recent exogenous events undermining compliance, we need to reassess how we view financial regulation.
Hence why aligning financial regulation with corporate goals to manage risk is the best way to maximise value from compliance management.
RegTech platforms, such as regulatory horizon scanning, are instrumental in integrating compliance into the wider corporate vision because of the platform’s ability to feed the latest regulatory updates directly to your compliance team.
With risks becoming more frequent and regulators becoming more stringent, finding innovative methods to use compliance will be critical for navigating a complex, demanding environment.