The importance of regulatory intelligence in financial services


In the past, financial regulatory bodies have demonstrated a pattern of easing regulations to curtail the dilapidating effects of exogenous shocks. 

For instance, when the pandemic struck, regulatory bodies around the world pulled back some of their rulings to give financial institutions room to adjust to the demands of a worldwide pandemic. 

With lockdowns gradually coming to an end and vaccination drives booming around the world, however, regulators are now reversing this trend and are passing stricter regulations to ensure the industry is operating within its traditional bounds. 

With governing bodies implementing tighter rules, financial institutions have been forced to adapt to a rapidly changing regulatory landscape. 

In this context, AI-driven automation solutions make regulatory tidings easier to manage by streamlining compliance workflows to execute rule changes on a much faster timeline.

In fact, by using regulatory intelligence solutions, financial institutions can turn compliance from a costly, reactive function—one that’s bogged down by inefficiencies—into a proactive, efficient arm that can respond rapidly to the latest rule changes.


What are the contemporary challenges regulatory teams face? 

To remain flexible and responsive, regulatory teams have to scan updates from governing bodies to extract the right data, assess it, and execute changes across their institutions to meet regulatory requirements. 

Staying updated on the latest developments, however, represents a significant workload for any regulatory team, particularly for those that have to monitor updates across local, national, and regional bodies. 

Most regulatory teams use manual methods to inform their organisations of the latest developments but have difficulty keeping up with the large volume of updates coming their way. 

While some institutions have responded by expanding their budget for regulatory teams, it comes with the requirement of higher ROI, which can still be difficult to achieve.

For regulatory teams, the problem arises when scanning regulatory updates and converting the content into useful information their institutions can leverage. Performing this deep data analysis is complicated to execute, especially within a short timeframe.

Today, regulatory teams require sophisticated technology that accelerates this process. In this environment, regulatory intelligence becomes an invaluable asset. 


How is regulatory intelligence informing the work of financial institutions?

At its core, regulatory intelligence automates compliance processes by leveraging AI capabilities such as machine learning and natural language processing to convert complex legal content into useful information.

These solutions differ from other RegTech software because they are smart platforms that can think for themselves and perform tasks as humans do. They automate routine, low-skill processes and provide smart solutions that reduce the administrative workload that comes with increased regulatory instruments.

Using AI means regulatory teams can also gain deep insight into all aspects of the regulatory chain, particularly where regulatory obligations are concerned. 

With compliance growing in scope, scale, and complexity, intelligence solutions of this nature can provide formidable support in adapting to the shifting regulatory landscape. 

Given that these platforms can analyse data to identify the information most relevant to financial institutions, they help regulatory teams give effect to compliance strategies more effectively and efficiently. 

They also provide insights across planning and management activities by highlighting where institutions are falling short in relation to new updates. This reduces the strain on regulatory teams, making it easier to turn compliance into a more efficient function. 

Today, investing in regulatory intelligence places institutions in a much more robust and resilient position because it allows them to respond rapidly to changes across regulatory bodies. In turn, it reduces compliance risks, minimising the likelihood of industry sanctions or penalties.


Powerful digitalisation is key to adapting to a changing regulatory landscape 

In the next few years, we can expect the regulatory landscape to shift rapidly as regulatory bodies tighten up their requirements. 

To meet these new challenges, financial institutions need to reconsider their approach to compliance—and regulatory intelligence is set to play a key role. 

By streamlining the workflows of compliance teams and helping them implement rule changes on a much faster timeline, organisations can meet the challenges and opportunities of the new normal with greater resilience. 

Downloads Alert