Compliance involves adhering to established standards and has become highly standardized to ensure data privacy and security within organizations. It ensures that business operations comply with set rules and regulations.
The standards used to achieve compliance are designed to tackle challenges related to safeguarding enterprise data assets.
As businesses, particularly in the financial services sector, digitize their processes, compliance is also evolving to become digital.
Digital compliance utilizes technology to ensure that a company meets all legal and procedural requirements concerning industry standards, laws, and regulatory frameworks regarding technology usage, data management, and business operations.
Automation
Automation enhances your team’s productivity. Automating tedious, repetitive tasks that drain your team’s energy and budget allows your employees to dedicate more time to strategic initiatives.
Whether it’s payroll, invoicing, client reporting, or data entry, digital transformation boosts efficiency and team experience while reducing human errors for greater accuracy and consistency.
For financial services firms, automating tasks like KYC screening, due diligence, and client onboarding and offboarding is particularly beneficial for boosting productivity. You can automatically create pay stubs for your employees, manage invoices and payments electronically, and generate customized client reports in minutes.
Leveraging Blockchain Technology and Smart Contracts
Blockchain and smart contracts offer improved transparency, security, and efficiency in compliance processes like contract management, document verification, and audit trails. They create immutable and verifiable transaction and agreement records and automate contract and rule execution and enforcement.
For instance, a blockchain-based compliance platform can verify parties’ identities and credentials, ensure contract and document compliance, and provide an unalterable audit trail.
Using Visualization and Data Analytics
Data analytics and visualization offer valuable insights and intelligence to enhance compliance decision-making and boost performance. These tools gather, integrate, and analyze data from multiple sources and systems, presenting the findings in a clear and interactive format.
They are instrumental in identifying trends, patterns, and correlations and measuring and benchmarking compliance performance and outcomes.
For instance, a data analytics and visualization tool can effectively monitor and compare the compliance status and performance across various business units, regions, or products.
Enhanced Customer Experience
Many financial companies recognize the significance of client experience, yet they often overlook the essential role technology plays in delivering a smooth and personalized customer journey. This includes intuitive mobile apps for financial management, virtual assistants for customer support, and leveraging data analytics to gain insights into client behavior and processes.
In today’s world, everyone desires instant access to data. Offering customized portals, dashboards, and reports with real-time information, available whenever needed, can provide a distinct competitive edge.
Another aspect that might be neglected is clients’ overall impression of the technology used by the organization they engage with. Strong digital solutions boost an organization’s reputation by demonstrating a commitment to excellence.
Furthermore, if employees attribute poor client service or project delays to technology failures, it reflects poorly on the company.
Conduct Pre-activity Checks Instead of Post-activity Controls
In conventional banking compliance oversight, legal and compliance teams typically examine business operations after they occur to identify any non-compliance issues. They are responsible for offering tailored advice on interpreting compliance policies and legal inquiries.
With automation, pre-activity checks can be carried out using digital rules that legal and compliance teams can establish internally. Business teams can then easily access these outcomes to determine if their actions comply with regulations.
Shifting from manual compliance monitoring to automated pre-activity checks decreases the reliance on time-consuming manual inspections and random checks after activities have taken place, while also minimizing compliance-related delays.
Integration With Existing Banking Tools
Embedded compliance enables financial institutions to incorporate compliance checks directly into their current technology systems.
This approach transforms what was once a painstaking, time-consuming task for IT departments into a seamlessly integrated compliance layer that can be connected to the bank’s existing infrastructure via an API.
New hardware purchases or extensive training sessions are unnecessary, allowing teams to continue using familiar tools.
When relationship managers use a CRM to gather client information for meetings or product proposals, they can easily access the embedded compliance layer right within their interface.
This feature allows them to determine whether their planned activities comply with regulations instantly. This seamless integration extends to tools used for portfolio management and trade execution as well, creating a beneficial scenario for everyone involved.
Endnote
Regulatory bodies often update regulations to align with emerging technologies, financial crimes, and industry-specific risks. This challenges businesses and financial institutions to adhere to increasingly strict laws.
To address these challenges, banks are beginning to implement digital compliance solutions. These tools help manage the influx of new regulations that arise from digital transformation and novel business models, the intense scrutiny from regulatory authorities, and the diverse regulations across different jurisdictions.