RegTech, or Regulatory Technology, is the application of cutting-edge emerging technology to help manage regulatory processes.
There's no mystery behind why many companies are struggling to implement new rule changes. Rule changes have skyrocketed by an eye-watering 500% in the last decade 1 . And in a world where a new regulatory alert is issued every seven minutes, many companies find it impossible to keep up with the pace of change.
Managing risk and compliance and conducting regulatory audits and supervisory reviews requires excellent attention to detail and can be incredibly time-consuming when done manually. And yet, that's exactly what many businesses are trying to do. A 2017 study found that only 69% of Chief Compliance Officers (CCO) say their organization leverages technology to help with compliance initiatives. What's more, less than half of organizations use data analytics and other advanced technology processes to manage compliance.
Navigating the world of regulatory compliance can be complex, but there's one thing we know for sure; the pace of new rules isn't about to slow down anytime soon. In fact, if recent trends are anything to go by, the rate might accelerate further.
However, this doesn't mean that companies should hang their heads in defeat, resigning themselves to being constantly one step behind. RegTech provides the answer.
RegTech, or Regulatory Technology, is the application of cutting-edge emerging technology to help manage regulatory processes. RegTech solutions solve regulatory challenges by streamlining monitoring, reporting, and compliance activities. These solutions leverage powerful tools and robust content libraries to manage tasks, policies and procedures, evidence, and internal, external, or supervisory audits.
The Pain Points of Managing Regulatory Compliance Manually Let's look at the critical tasks associated with managing regulatory compliance and why they are challenging to manage without RegTech solutions.
Keeping up to date with regulation - As we've discussed, regulation changes rapidly, and keeping up to date is paramount. Without technology, businesses rely on individuals to continually research upcoming changes, notify the relevant teams, and update the policies and procedures.
Identifying new requirements - To successfully implement a recent rule change, you need a thorough understanding of the rule and how it will impact your business. Several actions are involved in this step, including research on meeting compliance and presenting evidence of compliance.
Maintaining compliance and assigning tasks - Compliance requires that companies continually review and maintain their processes and procedures. It also requires that companies identify gaps in compliance. There could be upwards of 1000 or even more controls to keep track of in a large company, along with related tasks. Spreadsheets and emails are simply no match for the scale of the problem, and often, critical actions are missed.
Evidence for audits - Compliance activities need to be assigned, tracked, and evidenced for audits. This information has to follow a logical workflow and be readily retrievable when needed.
The Benefits of RegTech
Increasing productivity and efficiency - With Regtech solutions, companies can increase productivity by leveraging intelligent workflows and simple user interfaces to view every project comprehensively.
Analytics - Analytics reports help companies stay ahead of the competition by giving them a head start on solving problems or finding new opportunities.
Greater accuracy - Manual process handling is vulnerable to human error. Despite employees' best efforts, mistakes happen. The sheer amount of work involved in managing compliance today has exacerbated this problem, requiring employees to work harder and faster while maintaining a high degree of accuracy. RegTech solutions can solve this problem in many ways. For example, the software can link policies and procedures to the rules library and trigger notifications when a task requires action.
A comprehensive overview - Managing compliance manually usually involves several independent spreadsheets. It is needlessly convoluted and messy and opens the door for critical activities to be missed. When all risk and compliance activities are in one place, companies remain in control of the situation.
Streamlining work processes - Conducting compliance tasks manually is time-consuming, and a large part of this lost time comes from identifying the next steps. An automated RegTech solution eliminates this lost time - employees know which tasks to complete and boost efficiency.
Greater transparency - Companies with siloed teams and processes struggle to keep on top of their compliance activities. However, with RegTech technology tools, transparency is increased across the organizations. It promotes collaboration and ensures the company can obtain more valuable insights on their data analysis activities.
It's time to move regulation management beyond spreadsheets and into RegTech workflow solutions that work. A comprehensive GRC solution like BCube Analytics RegStacker empowers companies to collaborate with auditors, maintain compliance, and improve procedures in one user-friendly space. The future of managing compliance is RegTech.