Software solutions for managing risk and compliance are not a recent innovation. Some of the largest banks in the country have been using software solutions to manage risk and compliance for almost two decades by now. However, what has changed drastically is the architecture of these software solutions. Implementing a software solution used to be very expensive and caused a lot of business disruptions. Therefore, these implementations were limited to only the biggest banks in the country – the banks that could afford to spend millions of dollars to implement a technology that provided a marginal benefit.

We now have modular risk and compliance technology solutions that deliver much better value while requiring less of an investment of time and money to implement.

The Challenge with Legacy Software Solutions

Legacy software solutions, which were not modular in nature, posed many problems for banks and financial institutions. The first was cost; these solutions carried a multimillion-dollar price tag. The implementation costs of these solutions were also very high and included an expensive contract for continuous management of the solution. Bloat was a major concern when it came to these solutions. These solutions were designed to solve as many problems as possible, which may seem like a good approach, but it meant that banks and businesses would often end up paying for the whole solution when they only wanted access to a few selected features and functionalities.

The Genius of Modular Solutions

It is important to understand the distinction between risk and compliance tools and modular solutions. Tools are individual pieces of software that provide a desired functionality. Modular solutions are a set of tools and modules that can integrate with each other – like building blocks – to function as a singular solution. Modular solutions provide a better experience for small to mid-sized businesses. Some of the advantages of modular solutions include:

Modular solutions also cost much lower than legacy solutions. In legacy solutions the bank has no choice – it must pay for the whole solution or it can get nothing. Click To Tweet

Selective Functionality

The biggest advantage of modular solutions is that banks can select the functionality they need and only pay for the implementation and procurement of that functionality. Our Predict360 solution is a great example of a modular solution. Banks can choose which risk and compliance modules they want, and the modules integrate with each other, acting as one solution. This reduces bloat from the solution – there is no implementation time or money wasted on functionality that the bank does not intend to use.

Lower Costs

Modular solutions also cost much lower than legacy solutions. In legacy solutions the bank has no choice – it must pay for the whole solution or it can get nothing. This meant that they would either have to pay the full price of the solution or make do without using the solution. There are no such limitations with modular solutions. Since banks only need to pay for the functionality that they need, the costs of procurement and implementation are both kept at a minimum.

Step-by-Step Implementations

Instead of paying for the full solution with all its bells and whistles, banks can start out with a single module or tool from within the solution. The costs of one module will be very low and the bank gets the opportunity to solve challenges and receive value before making a commitment to implement additional modules. Once the bank is comfortable with the module they are using, they can simply add the other modules to their implementation later on. This is the lowest risk way of implementing technology – if the solution is not a good fit for the organization, the costs will be so low that the effect on the bottom line will be almost negligible.

Excellent ROI

The lower costs and being able to select the needed modules result in an excellent return on investment for modular solutions. Usually, it takes businesses years to be able to earn back the investment they made on the technology. However, with modular solutions, the implementation and maintenance costs are so low, and the benefits are so immediate that businesses can start generating ROI within months. The negligible effect on the bottom line of the bank, combined with exponentially faster risk and compliance processes, means that the stakeholders of the bank end up very happy with the implementation.

Is your bank looking for a way to improve the way it manages risk and compliance? Get in touch with our risk and compliance domain experts to see what our American Bankers Association endorsed risk and compliance solution can do. Our solution is modular and after understanding your bank’s needs our experts will be able to tell you which modules will be the best fit for your organization.