Predict360 Regulatory Change Management
Most people do not realize how important banks are to our economic system. For most of us banks are simply businesses that allow us to store our wealth and get loans and mortgages when needed.
Banks play the crucial role of investing capital – which is crucial in a capitalist system. Banks allow people to create and grow businesses, they allow people to create retirement funds, banks facilitate trade between countries, and no business would be able to function at its current efficiency levels without banks – most won’t be able to function at all. That is why when it comes to compliance regulations, most regulations are focused not on retail banking, but on the most impactful parts of banking.
Will compliance with regulations always be a roadblock towards efficiency?
Most of us have had a frustrating experience at a bank. Sometimes banks tell us that it will take them a few days to transfer money from one account to another and it seems unbelievable in this day and age. Most transactions are instantaneous – we can order food online and the payment is instant, the food delivered in half an hour, then how can it take multiple days for the bank to transfer money from one account to another?
The answer to most questions of this type is that compliance with regulations results in extremely slow turnaround on certain transactions and banking activities. Many of these regulations and rules are decades old – back then it made perfect sense that transactions would take a few days. These regulations have not been updated for the modern world, which is why a lot of the work is still being handled manually.
Technology and financial services compliance regulations
Technology has been a huge blessing for banks, but it is also now turning into a problem. The problem is competitors that are ‘born digital’. There are multiple apps which have went mainstream, along with payment platforms, that allow people to bypass the need of a bank account and handle financial transactions painlessly. These apps and payment platforms are preferred by the younger demographic, often because they are more convenient. They can offer instantaneous transactions because they are not bound by the same rules as banks and other financial institutions, since they do not partake in most banking activities, instead picking one service and doing it well.
Have a look at how our automation based regulatory change management tools help your organization achieve better compliance levels at a faster pace across the organization.
This is, as expected, a major problem for banks and financial institutions. The banking system has evolved into the efficient machine it is today over centuries, and retail banking has always been a crucial component of this system. The next generation is being wooed away from banks and financial institutions by these apps and platforms, which means that banks will have to reengineer core processes to maintain the sustainability of the whole system.
Banks do not have a choice – they must adhere to compliance regulations. However, some steps are being taken to improve the situation. Regulatory bodies themselves have realized that they may be stifling innovation in banks by limiting their potential through regulations and have announced that they will be taking a better approach towards technology infusions in banking. As we said before, banking is simply too important to the economy to be left on its own devices. We need to work together to make sure that these obstacles are overcome, because banking runs the whole economy.
The Fintech (or Regtech, to be more exact) sector of information technology has also come with smart solutions to these problems. Most compliance, risk, and regulatory change management solutions that are available in the market successfully ensure compliance with regulations. They ensure that the documentation standards and the audit trails required to prove compliance are generated and stored. These systems work within the current regulatory compliance framework, ensuring as much automation as possible. If you want to see what such a solution can do for your business, get in touch with our team for a demonstration and trial of the Predict360 Compliance and Regulatory Change Software.