While risk and compliance technology has been in use in large banks and enterprises for more than a decade, mid-size and smaller banks and financial services organizations are beginning to adopt different solutions. Risk and compliance software used to cost millions of dollars to implement and maintain. Smaller banks and businesses could not justify the cost – they wanted the benefits, but the costs outweighed the benefits. This is no longer true – the cloud solutions available now cost a fraction of what the same technology used to cost a decade or so ago. Back then you could only get these solutions from legacy providers who designed solutions for large clients.

However, even as the costs have gone down and it has become easier to implement risk and compliance technology, there is still some apprehension among bankers and other finance industry executives when it comes to implementing risk and compliance technology. Risk and compliance technology implementations are a unique experience for individuals working in smaller organizations. These businesses are used to implementing general-purpose technology solutions to store data and collaborate but those required input mostly from the IT department.

Risk and compliance technology cannot be solely selected by the IT department, because choosing the right technology and solution to implement is a decision that can only be made by the risk and compliance experts in an organization. Here are some factors which can help an organization’s risk and compliance departments determine what type of a technology implementation will be best for their bank or institution.

There are solutions that help streamline the RCSA process or automate compliance monitoring. It is easier to implement these tools because they do not disrupt the risk or compliance infrastructure of the organization Click To Tweet

The extent of automation

The first thing that the risk and compliance experts need to focus on is how much technology they want to implement and what type of functionality they want from the solution. Risk and compliance technology tools come in all shapes and sizes. There are tools which help with a specified risk or compliance process and there are solutions which completely overhaul the way an organization managers enterprise-wide risk and compliance.

If the business only needs to fix a small problem or wants a specified functionality then it may be better to start out with a solution. There are solutions that help streamline the RCSA process or automate compliance monitoring. It is easier to implement these tools because they do not disrupt the risk or compliance infrastructure of the organization. Such tools are also a great way for businesses to test the waters. If there are plans to completely overhaul risk or compliance management, the business can first test the ROI of the solutions by implementing a small part of it.

The model of the technology being implemented

Businesses should also investigate the model/structure of the risk and compliance solution they want to implement. The most popular type of model these days is the cloud model. Getting a cloud solution provides the best ROI for small and medium sized businesses. Procuring a solution that runs on the hardware and network of a business has its benefits; the business has complete control over the solution. However, it also carries many costs. Expensive hardware must be purchased and maintained to run the solution. It is also expensive to maintain the solution; the business must either hire its own experts or call in consultants whenever there is an issue; neither can be done at a low cost.

Cloud models are optimal because the solution is maintained by the solution provider since the solution is on the cloud. There is no need of procuring hardware either – since the solution is running on the cloud, the business simply needs to provide its employees access to the solution through a web browser. Big enterprises and banks sometimes opt for in-house solutions because they can justify spending millions of dollars on the solution, but smaller banks and organizations should choose the cloud model instead.

Payment Structure

Generating a good ROI is essential for any implementation in a business, which is why it is important to look at not just the technology being implemented but also the payment structure attached to different models. In-house models require a major investment to implement and maintain the technology. Businesses must invest in hardware and then pay a large sum to the solutions provider to own the solution.

Cloud solutions are much easier to procure. Implementation is inexpensive as well since the solution will be hosted on the cloud. Instead of a large investment at the start of the project, cloud models can be paid for on a subscription basis. This makes it easier for banks to spread out the cost of the solution over the next few years. Instead of a major hit to the profitability of the bank, the cost of the solution appears as a monthly payment that is hardly noticeable.

Are you looking for the perfect risk and compliance solution for your business? Get in touch with our risk and compliance experts to see what type of a solution will provide the best ROI for your business.