QA testing is essential to ensure that the organization’s compliance framework is working as intended. Businesses put a lot of thought, time, and investment into their compliance controls. These controls are important because they can prevent a compliance problem for occurring and they also help in detecting problems to ensure that they can be resolved before they damage the organization. A major compliance violation can result in heavy monetary penalties by regulatory bodies, loss of reputation, and a loss of clients as well.

What is QA testing?

QA Testing is the process of assessing the strengths of compliance functions within the organization. It is accomplished by ensuring that all the business units have the right controls in place and all the open issues are being resolved as they should be. This is achieved by sending out a questionnaire to different business units. The questions in this questionnaire shed light on the issues present in the business units and the processes being followed. The compliance department also asks for all the compliance data and documentation the business unit can provide. This documentation and data is then analyzed to discover vulnerabilities in the compliance framework of the organization.

Using a centralized compliance system means that all the data is present within one system, which means it can be easily compared and analyzed Click To Tweet

The problems with QA testing

Compliance isn’t just a simple function – it is prevalent throughout the organization. Compliance involves collaboration between different business units within the organization. The front-line needs to ensure that all the required documentation is completed, all the right information is delivered to the clients, and that all the necessary checks have been done about the history of the customer. The compliance department needs to ensure that compliance is being followed throughout the organization and that the front-line has adequate knowledge and training to enforce compliance. The board needs to ensure that the organization is resolving compliance issues and strengthening the compliance framework. The front-line, the compliance department, and the board are usually referred to the 1st, 2nd, and 3rd line of defense respectively.

The problem is that this leads to an immense amount of compliance data and documentation, too much to be properly analyzed. If a business has 15 different business units, there will be 15 different sources of data and documentation. There is usually only one compliance department to analyze all this information. This leads to two major limitations:

The frequency of QA testing is not enough

Due to the immense amount of labor required to go through this documentation, businesses can only do a limited amount of QA testing. QA testing is too essential to ignore, but it is too costly to carry out as much as needed. Businesses thus do these tests periodically, usually once a quarter. This means that if there is a compliance problem, it will only be discovered by the end of the quarter or even later if the frequency of QA testing is lower than once per quarter.

The scope of QA testing is limited

The immense amount of labor required doesn’t just limit the frequency of QA testing – it also limits the scope of the testing that is done. Each business unit will have thousands of different transactions that can be analyzed. Since it is impossible to analyze the data and documentation associated with all these transactions and processes, businesses resort to taking a sample to analyze. They may take a 100 or a 1000 data points and limit their study to them, because anything else is beyond the capabilities of the compliance department.

Augmenting QA testing with compliance technology

Compliance technology can help overcome these limitations. Here are just some of the benefits which augmentation can provide:

  • Using a centralized compliance system means that all the data is present within one system, which means it can be easily compared and analyzed
  • The compliance system also acts as an issue management system. This means that a record of all compliance related issues is present within the system, and can be accessed whenever needed, which allows the compliance department to easily accomplish QA testing
  • The automation present in compliance technology exponentially increases the efficiency of compliance QA testing, which allows businesses to perform QA tests not just on an increased amount of data but also with an increased frequency
  • The results of the QA testing are also interactive and allow management to drill down into reports as required, which increases the visibility of QA testing for the board

There are many more similar benefits which allow organizations to strengthen their compliance framework. If you want to see how your organization can benefit from automated QA testing, get in touch with our team for a demo.