How RegTech is Tackling Today’s Complex Regulatory Landscape Better, Faster and Cheaper Than Legacy Systems
What solutions exist to manage regulatory change and compliance risk? How does legacy compliance management software measure up against RegTech in the present regulatory environment?
The financial crisis of 2008 significantly altered the regulatory climate for financial institutions. Along with extensive and frequent changes to rules and regulations, modern technological advances and a shift in consumer demands have changed the way financial institutions do business. A lack of collaboration within a fragmented financial regulatory system has made it difficult for many firms to identify which regulations are applicable, which regulators oversee their activities, and which areas are receiving the most regulatory attention.
Regulators have indicated that compliance management systems are not evolving at the same pace of compliance risks for many organizations. The development of an effective compliance risk management program is multifaceted, further emphasizing the need for enhancements to existing systems to ensure adequate risk management practices are established.
Regulation Technology, or RegTech, aims to expand the capabilities of compliance teams when monitoring and collecting data for analysis and reporting by applying automation to improve the efficiency lacking in manual systems.
Modern regulatory change management (RCM) solutions are specialized to meet the specific challenges faced by highly regulated industries, using technology to improve data content, analytical tools, management information systems and reporting, response tracking, deployment and on-boarding processes and cost. When reviewed in contrast to the benefits provided by RegTech, legacy GRC systems are unable to provide agile, up-to-date and intelligent data needed to adequately monitor, measure and control compliance risk related to regulatory changes.
By moving to RegTech promptly, institutions will be poised to take advantage of new technology as it advances and the advantages of doing so will continue to compound over time.
- Financial institutions have experienced an increase in compliance risk in recent years as a result of changing regulatory landscape and the emergence of new products, services and expanded geographical areas of operation.
- Regulators have found that organizations are not evolving compliance risk management programs to meet modern requirements.
- Manual processes and traditional legacy compliance software have been inadequate at meeting the faster pace of regulatory change and complexity of risk
- RegTech allows organizations to efficiently identify, monitor and manage compliance risk, and respond to changes with scalable, easy-to-use and cost-effective solutions.
What You’ll Learn
In this whitepaper, we explore the present-day challenges that highly regulated institutions face in implementing effective compliance management systems, with a focus on BFSIs (Banking, Financial Services, and Insurance). We do a side-by-side analysis of legacy GRC systems against modern RegTech solutions and examine why legacy GRC systems fall short of fully handling today’s increasingly complex regulatory landscape.