Regulatory change management is an on-going process. Regulatory updates have become more frequent in the previous decade and banks and financial institutions have stepped up their change management tools accordingly. Managing this change doesn’t just require more employees or longer work hours – it also needs smarter approaches towards adapting to change, to make it a sustainable process.
Let’s have a look at the necessary ingredients of a sustainable regulatory change management process.
Monitoring and awareness
The first step towards managing change is to be aware of the changes that are coming up. The first step of this is to monitor the upcoming changes. What regulations are being discussed or finalized? When are they expected to come into effect? Major regulations may take a year to be finalized, while minor updates happen quicker. Banks and financial institutions need to immediately know if any new regulations have been released so they can immediately go through them and understand what needs to be done.
Understanding the changes
Once new laws or regulations have come into effect or have been announced, banks need to go through them diligently to understand what has changed. The first step is to compare the new regulations with the old regulations and understand what has changed. Maybe a section has been added, maybe something has been removed, and so on. Every change needs to be highlighted.
Once all the changes have been noted, the next step is to find out the changes that are relevant to the organization. Some changes only affect creditors, some only affect other entities, while others only target businesses operating in a particular area or industry. Thus not all the changes that occur are relevant.
Seeing what is affected
Once the changes that are relevant to the organization have been extracted, the next step in the regulatory change management process is to see what is affected by the changes. This is one of the most complicated and important parts of the whole process. Regulations affect everything about how the business operates and even a minor change can have an effect on the whole organization. Every policy, process, document, and structure within the organization has to be compliant with the regulations, and when a change occurs it is important to find out what is affected by the change.
This is a complicated process because every document, policy, and process need to be mapped. The relationship between them needs to be known because only then will the organization be able to understand what is affected by the change in regulations.
Implementing the changes required
The final part of the regulatory change management process is to implement the changes that are required. This is an extensive task involving people from multiple departments. The whole organization needs to understand the regulatory changes that they are required to implement and decide the best way to implement them. If there is a small regulatory change, then the change management process is also small. However, there are often major changes requiring major overhauls. Whole products can become non-compliant with a regulatory update, and new avenues are also opened up because these updates sometimes contain regulation as well.
How GRC helps throughout the change management process
The GRC regulatory change management framework (covered in our white paper in more detail) automated many of the parts of the regulatory change management process. There is no need to monitor regulatory changes if you have a regulatory change management solution in place. Any update that happens is automatically updated within the system in place.
The most important part played by regulatory change management automation is in understanding what is affected by the change. Risks are mapped in these systems, which means that there is no need to investigate what is affected by the changed; the system will you itself. The intelligent parsing in these solutions can even extract the regulations that are relevant to your organization.
If you want to improve the regulatory change management process in your organization and want to see how a regulatory change management system can help you, you’ve come to the right place. Get in touch with our team and we will arrange a demo of our solution to show you how it can serve your needs.
About the Company
360factors, Inc. (Austin, TX) helps companies improve business performance by reducing risk and ensuring compliance. Predict360, its flagship software product, vertically integrates regulations and requirements, policies and procedures management, risks and controls, audit management and inspections, and on-line training and qualifications, in a single cloud-based platform based on artificial intelligence.