There have been a lot of discussions about the upcoming regulatory changes and how regulatory change managers need to be more vigilant if they want to successfully guard the organizations as they navigate the new regulatory framework. Our previous blog discussed some of the major forces that are impacting the regulatory change management domain and will need to be managed by regulatory experts across the country. It is also important to look at not just the challenges and opportunities that will be faced by the financial sector in the year 2021 and beyond, but also at the tools and strategies they can use to succeed in 2021 and beyond.

Remove the Technology Handicap

Too many organizations are still managing regulatory change manually. Regtech has quickly become mainstream in the financial industry at this point, any business which is not using technology to manage regulatory compliance and changes is playing the game with a handicap. It is easy to understand why so many businesses did not have regulatory technology implemented five or ten years ago – the technology was expensive and hard to implement a decade ago. However, the new solutions that are available in the market can be easily afforded by even the small organizations and take just a few days to implement with minimal disruptions. At this point the benefits of Regtech easily outweigh the costs of Regtech by a significant margin.

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Rethink the Regulatory Framework

The absence of any regulatory technology also means that many businesses do not have a codified regulatory change management framework. They have documents, spreadsheets, and email threads which talk about the different regulatory issues and keep track of the regulatory changes, but they do not have a concrete framework which is visible to the whole organization.

It is time to rethink the way regulatory changes are handled. Regtech solutions simplify and illuminate regulatory change processes, enhancing not just regulatory change performance but awareness as well. Instead of sending out documents which might be ignored by the stakeholders within the organization, Regtech enables businesses to send out intelligent notifications of only the relevant regulatory changes, which greatly enhances the way people respond to these changes.

Better Monitoring Capabilities

The next few years promise to be especially important years for regulatory change management. As we have covered in this blog previously, there are many different forces acting on the regulatory framework right now. These forces include:

  • A government with enough seats to pass regulations and create new rules for the financial sector that has announced it will be creating new regulations related to climate change.
  • Disrupting fintech services that are introducing new delivery channels to the financial sector. These services are easier to use than ever before, but they often do not follow the same regulatory framework as banks.
  • As the economy recovers from the pandemic, there will be many new opportunities and challenges for the financial sector in the next few years.

Manual regulatory change management methods may have help up to the older regulatory framework, but it will quickly buckle under the weight of the changes that are expected to occur in the next few years. Regtech powered regulatory change management solutions that automate and streamline RCM monitoring processes will be a competitive necessity for banks and other financial institutions.

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Synergy Between Risk, Compliance, and RCM

Creating synergy between risk, compliance, and regulatory change management processes can bring about a foundational change in the way an organization interacts with all three domains. These interconnected domains are often siloed and do not share data and intelligence because of the complicated nature of manually managing all the documentation and communication. Bringing risk management, compliance management, and regulatory change management processes under one roof helps businesses remove redundancies while enhancing the analytical and predictive capabilities of all three domains.

Regulatory Change Management Software

Under a unified model, when a new regulatory change is introduced, it is quickly reflected under all domains. The RCM experts can connect the new regulations with the risks and compliance requirements that will be affected. The risk and compliance teams will be notified of the regulatory changes. The compliance team can create new SOPs or reengineer older processes to ensure compliance with the new regulatory updates, while the risk team can focus on the risks that will emerge due to regulatory changes.

The experts from the three domains can easily collaborate, greatly increasing organizational cohesion and reaping the efficiency and analytical benefits that come about because of the unified risk, compliance, and RCM architecture.

Modern Regtech solutions such as Predict360 are designed to be modular in nature – banks and financial institutions can use them to manage risk, compliance, or RCM and they can also implement the full suite to manage all three under the same platform. Interested in seeing how your organization can benefit from Regtech powered RCM processes? Get in touch with our regulatory compliance experts for a demonstration of the American Bankers Association endorsed risk and compliance management solution Predict360.