At the end of every year the management of financial institutions formulates a plan for the following year. The goal is simple; to ensure that the institution has the plans and tools in place that will be needed to meet upcoming strategic and tactical objectives. There is a focus on lessons learned from the previous year and on closing the vulnerabilities that were previously discovered. This year, however, is special, due to uncertainties from the pandemic and election.

As we head towards 2021, financial institutions will need not just the right strategies but also the right tools if they want to tackle upcoming challenges successfully while targeting growth for the organization.

1 – Post-Pandemic Challenges

This has been said again and again but it is true every single time – the pandemic is a truly unprecedented event for modern times, and we are now in uncharted territory. The modern economy has never had to recover from disruption at such a global scale for so long. Things are looking good now – there are multiple vaccines on the horizon, doctors now have a better idea on how to treat patients with Covid-19, and life is slowly returning to normalcy.

Complimentary Webinar - Why & How to Integrate ComplianceTesting & Risk Assessments

Governments around the world introduced many new policies to ensure that businesses could be protected during this turbulent era and they will be doing the same to ensure that things can be brought back to normal (or brought to a new normal at least) as quickly and safely as possible. This has created a lot of uncertainty in the market, as no one is sure about what steps will be taken because of the unprecedented nature of the economic reopening.

This is why many financial institutions aren’t just focusing on their regulatory change management strategy for 2021 but also on the tools they have. Banks and financial institutions want the ability to quickly detect, assess, and implement changes as regulatory changes are announced by regulatory bodies. Regulatory change management technology has emerged as the obvious solution for organizations in the financial sector to meet the challenges they expect to face.

Local Intelligence

One of the most unique characteristics of the pandemic is that it affected different types of industries in different locations to varying degrees. Some industries saw a huge increase in sales because their products were well suited for a lockdown. Ecommerce was at an all time high as many stores were closed and people were apprehensive about going out to shop. On the other hand, businesses in the hospitality sector and the airline industry were badly affected by the extreme decrease in people traveling and staying at hotels.

This means that the way the economy reopens will look different for different states. States that specialized in industries which saw a huge drop in businesses will see a slower return to normal. Banks and financial institutions cannot rely on economic reports and regulatory news at a federal level – they need regulatory intelligence that applies to their state.

Regulatory intelligence technology helps financial organizations track important local metrics that can in turn affect regulation. Instead of simply monitoring the news coming out of regulatory bodies, risk and regulatory change intelligence solutions monitor the same metrics that are being used by regulatory bodies to decide on what changes to make. This proactive approach towards tracking metrics gives the organizations more time to formulate a response and be ready for upcoming changes.

2 – Changes in Local Governments

2020 was also an election year which only increased the turbulence and uncertainty in the market. While the largest banks in the country may look at the presidential election as the most important one, local and community banks are more focused on state elections because the state elections have a direct effect on the banks and what they can expect local regulatory bodies to do.

The approach that banks and financial institutions need to take will depend on the outcome of their local elections. Some states have experienced few political shifts while others have seen changes. The institutions in those states will need to quickly come to terms with the expected changes in governance and ensure that they are ready to meet any regulatory changes.

Regulatory intelligence technology helps financial organizations track important local metrics that can in turn affect regulation. Click To Tweet

3 – Faster Regulatory Updates

There has been an increase in the pace of regulatory updates. This was highlighted by Maria Devassy, the VP of Business Development at Compliance.ai during a webinar with 360factors. She talked about how during a regular week it was normal for a mid-sized bank to deal with 200-300 regulatory documents. This is an astonishing amount of regulatory compliance workload and financial organizations need all the help they can get to ensure that all regulatory requirements are managed, and regulatory changes are monitored.

Financial organizations are now much more well equipped to deal with regulator changes due to regulatory technology (often referred to simply as Regtech). Regtech solutions automate and streamline regulatory change management processes. The exponential increase in productivity and efficiency in regulatory change processes ensures that financial organizations will be easily able to rise to the challenge of increased regulatory updates and course corrections as the economy reopens over the next two years.

Time for an Upgrade?

Financial organizations have looked at the current situation and come to the realization that they need to upgrade their regulatory change management framework. There is a lot of work to be done and the smartest approach is to use technology to ensure that the risk, compliance, and regulatory intelligence teams within the organizations are not overwhelmed.

If your organization wants to see how it can achieve greater regulatory intelligence and improve the way it implements changes, get in touch with our regulatory change experts for a demonstration of what Predict360 can do for your organization.