Compliance management is arguably a debated topic in the RegTech space and media outlets. While some say the market for regulatory technology solutions is likely to explode, others believe it will also face some challenges due to the overall uncertainty surrounding the topic.
If one thing is for certain, it’s that Software as a Service (SaaS) for compliance management is very unlikely to vanish from the tech landscape—as more than ever, companies are struggling to uphold business continuity.
This article will outline how banks are dealing with business continuity in compliance, the challenges they face when managing regulatory changes, and how SaaS can help streamline those compliance management complexities.
The status quo of compliance management in banks
Financial institutions, especially the most traditional banks from all around the world, were caught by surprise by the pandemic. This meant that banks had to quickly adapt to new forms and norms of working and collaborating.
Remote work and workforce constraints are just a few of the many changes that came about with COVID-19. However, such changes—which often were made from one day to another—have made it hard for banks to quickly adapt and ensure the continuity of day-to-day operations. Especially in legal and compliance, where traditional business processes, such as paper-based manuals and compliance training, are the status quo.
Complying with complex regulations in a highly regulated industry is a crucial task, yet it can be very time-consuming. And with new laws and regulations being added every day, this becomes a continuous and repetitive process. That is why it is of the utmost importance to guarantee business continuity.
The challenges of business continuity in compliance management
To understand the main challenges banks face when handling business continuity in compliance, we conducted a survey. We asked legal and compliance teams from financial institutions what are the key challenges or issues they encountered when keeping their compliance units operational.
The results showed access to legal and compliance knowledge to be the biggest challenge, followed by a lack of technological infrastructure for legal and compliance tools. These factors can harm the performance of legal and compliance teams, which emphasizes the need for a shift in compliance management.
Traditional vs. digital compliance management
When sourcing compliance knowledge, many financial institutions revert to traditional approaches such as paper-based manuals and fixed memos. However, these options can become limiting long-term as they compromise scalability and resource optimization. Furthermore, this resource-intensive approach is often a tedious task.
A way to combat these challenges could be opting for a digital solution—ideally cloud-based. Compliance management softwares can reduce complexity in some compliance management processes, and all with just a few clicks.
This transformation—from traditional to digital—is already a reality for many financial institutions. Improving such technological infrastructures can help simplify daily work processes around compliance management.
How SaaS can help digitise compliance management
Organisations require tools in order to digitise compliance knowledge. The gap of knowledge between compliance management officers and business officers, which is often filled by text-based compliance resources (such as manuals and written policies), can be inefficient and poorly accessible.
We believe that stakeholders should be able to get easy yes-or-no answers to their most pressing regulatory questions, and not have to rely on cumbersome paper-based knowledge sources. A digital compliance management software can provide fast and effective answers, as well as allow more time for financial institutions to invest in strategic issues and customer experiences—simultaneously.
Compliance management departments need to also be able to share their know-how in a seamless and independent manner. The access to regulatory knowledge should be available through bullet-proof user interfaces and advanced programming interfaces, all which would be radically simple to navigate and use.
More importantly, the compliance solution needs to be detached from the availability of compliance teams. This way business stakeholders can remain operational wherever, whenever. Consequently, this requires financial institutions to trust the capabilities of technology and acknowledge its role in making their organisations lean and more resilient when it comes to compliance.
Why SaaS is the future of compliance management
The pandemic has accelerated digital developments upon financial services companies all over the world. In order to enable business continuity, banks have resorted to digital compliance approaches.
At Apiax, we believe that SaaS is the future of compliance management. Not only because it allows for financial companies to focus their efforts in customer satisfaction, but enables them to stay on top of regulatory changes in compliance. By digitising this process, financial institutions can also increase their competitive advantage.