Giving Banks a Competitive Edge with Risk and Compliance Technology

Frontend technology has quickly become the new frontier for banks looking for a competitive edge over other banks in the area. Customers want better and faster services, which is why banks and financial institutions are focusing on integrating fintech solutions to deliver faster services. This discussion often misses how much of a gamechanger it can be to focus on the backend technology framework present within the organization. It can provide a sustainable competitive edge that slowly increases the gap between an FI and the competition.

Risk and compliance management are often considered cost centers. However, modern tech solutions for risk and compliance open new possibilities. Instead of just being cost centers, risk and compliance departments can provide meaningful contributions that help an organization achieve its goals and objectives. The benefits are structural – meaning that they make the bank a more efficient institution in a sustainable manner.

Faster Turnarounds

The most apparent benefit that risk and compliance technology can provide for the customer experience is speeding up existing bank processes. Risk and compliance platforms have monitoring capabilities that help banks catch problems and errors quickly. They also have many collaborative tools that enable different departments and teams within the bank to work together more efficiently. Such features result in the bank being faster at most risk and compliance activities, directly passed on to the customer. Compliance and risk activities such as KYC are easier to manage, which enables banks to improve efficiency and speed at the same time.

Fintech Integrations

Focusing on backend technology also benefits banks that want better frontend technology. Customers like fintech-based solutions because they promise faster and easier processes than traditional banking. Banks can often struggle when integrating a fintech element into the bank’s existing product/service portfolio because there is a disconnect in how traditional banking processes are carried out compared to fintech processes. Risk and compliance technology platforms can bring together these separate domains on the same platform. When risk and compliance are already being managed digitally, banks and FIs can integrate fintech operations into their competitive arsenal.

Regulatory Relationships

Banks and FIs can also ensure that they have a better relationship with regulators than their competition with risk and compliance technology. When regulatory bodies look at a bank’s operations, they do not simply look at the errors made by the bank – their primary focus is on the apparatus available to the bank to ensure that such mistakes can be caught and fixed in time. Regulators are aware that no entity can operate 100% perfectly. There will be some lapses, so the focus is on ensuring that every bank and FI diligently ensures that mistakes are detected and fixed.

Risk and compliance management are often considered cost centers. However, modern tech solutions for risk and compliance open new possibilities. Click To Tweet

Banks often have to show regulators the controls and checks present in their risk and compliance framework because that determines the strength and stability of their banking operations. Risk and compliance technology make it easy for banks to demonstrate their commitment and their efforts to manage risk and ensure compliance. Instead of creating reports that show their efforts, the banks and FIs can directly establish the risk and compliance platform their use to the regulators, showing how powerful the technology is at keeping problems away.

Growth Opportunities

Risk and compliance technology also gives a bank more strategies and opportunities to grow by making it easier to scale up its services. There are many ways banks can expand, and risk and compliance technology prove instrumental for all:

Catering to New Markets

Banks can choose to invest in new markets that offer products that cater to a new market segment. Risk and compliance technology help banks efficiently manage the risks and compliance issues without increasing the complexity of work for the risk and compliance teams.

Expanding to New Locations

Expanding to a new territory can mean subjecting the bank to a new regulatory framework if the expansion crosses state lines. Moving to a new location means that the risk and compliance teams will have to reassess all the bank’s operations and create a new framework that helps employees in the new location manage risks and ensure compliance. Risk and compliance platforms can easily add all the risks and compliance controls required in just a few clicks, simplifying the task, and making it easier for management to monitor risk and compliance from a central location.

Increasing Size of Operations

Risk and compliance workloads increase when a bank expands, putting more strain on the risk and compliance teams. Risk and compliance technology automate many risks and compliance tasks while streamlining other processes, significantly reducing the labor hours required for risk and compliance teams for each task. This increase in efficiency helps banks scale up their operations without worrying about risk and compliance workloads.

Interested in seeing how your organization can benefit from risk and compliance management technology? Get in touch with us for a demonstration of Predict360, the American Bankers Association (ABA) Endorsed solution for risk and compliance.