Regulatory changes are an inescapable reality of businesses operating in the financial sector. The government is understandably concerned about ensuring that the financial sector manages risk properly. The global crisis that began due to a few banking institutions violating the spirit, if not the words, of regulations and laws has only increased regulatory pressure on the sector. Businesses need to ensure that they manage regulatory change in time. However, businesses that want to leapfrog the competition know that simply adhering to regulatory changes in time is not enough – the key to beating the competition is to stay ahead of regulatory changes.

The reactive nature of regulatory change management

While most businesses realize the importance of proactive regulatory change management, few can achieve it. Managing regulatory change requires sifting through thousands of documents to ensure that you have accurately assessed the effects of the upcoming changes and then again making thousands of changes in policies, processes, and workflows to accommodate the changes. The immense amount of time and efforts required means that businesses can barely keep up with regulatory change. They succeed in ensuring that they are ready for the changes by the time they become the law, but there is a possibility to deal with the problem in a more proactive manner and achieve much better results.

Proactively managing regulatory change results in higher productivity throughout the organization. Click To Tweet

The advantages of proactive regulatory change management

Before we get into how we can proactively manage regulatory change, let’s look at why we should aim for proactive management. The benefits of being proactive include:

  • Increased productivity
  • Lower costs
  • Competitive advantage
  • Better compliance and risk management

Increased productivity

Proactively managing regulatory change results in higher productivity throughout the organization. Regulatory changes create a lot of uncertainty within the organization. If there is some major regulation coming out, the whole business will have lower productivity because of the uncertainty created by the regulations. Employees don’t know which parts of the business will need to change, which makes planning for the future very difficult. Organizations that can proactively assess regulatory changes and adjust themselves accordingly can shorten this uncertainty period to ensure higher productivity throughout the organization.

Lower costs

Proactively managing regulatory change management also lowers the overall costs of compliance. By shortening the amount of time organizations need to adhere to new regulations we also lower the labor hours that need to be invested into regulatory change management. It also decreases the amount of possible compliance violations by giving the organization more time to train people for the changes in regulations, which results in lower penalties levied due to compliance violations.

Competitive Advantage

Regulatory change management isn’t simply an operational directive – it can also be a great sales and marketing tactic. Businesses need to update their policies and processes according to upcoming changes before they can pursue new business – they need to know what the changes will mean for their organization before making any commitment. Proactively managing regulatory change means that your organization will already be planning and making strategies while the competitions is still trying to make sense of the regulatory changes.

Better compliance and risk management

Proactive regulatory change management has a direct effect on compliance and risk management. Knowing the scope of the regulatory changes and how it will affect the organization allows businesses to become compliant quickly. Risk management also becomes easier because new risks can be mitigated quickly.

Here is what our solution can do for you

Have a look at how our automation based regulatory change management tools help your organization achieve better compliance levels at a faster pace across the organization.

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The key to staying ahead

The key to staying ahead of regulatory changes is to use technology and introduce automation wherever possible. A very small example is detecting changes in the regulations – if there is a 100-page document with 5 slight changes, it will take a person many hours to go through the old and new versions of the document to find out where the changes occurred. Computers can detect every change in the document in a matter of seconds.

Organizations need to be smarter in how they use their resources. The experienced and costly risk and compliance personnel should not be wasting their time doing work that can be done by computers better and faster – all such work should be offloaded to technology, so the personnel can instead focus on the big picture and improving the outlook of the organization.

Want to see how an integrated regulatory change management like Predict360 Regulatory Change Management System will benefit your organization? Get in touch with our team and find out!