Compliance departments are usually staffed with lawyers and accountants. Lawyers because of their expertise in the legal domain, which is a necessity for interpreting and enforcing compliance. Accountants because their technical expertise in the matters of finance and record-keeping were necessary for compliance work. However, over the past few years compliance risk management departments now require a third type of employee; the technology expert.
Basic tech skills have been a requirement for compliance and risk jobs for a long time. The financial sector was a pioneer in adopting computers and information technology thus every professional in the industry has better-than-average basic tech skills. Accountants are also adept at managing data and using it to generate insights, which requires considerable tech skills. What is new is the GRC approach towards compliance risk management.
Compliance is outgrowing spreadsheets
Spreadsheets were a very common method of storing information related to compliance. Generally only large organizations had specialized systems for compliance, most businesses simply used Microsoft Excel. Excel is a very powerful software for storing and manipulating information and most people working in the financial sector are well-versed in Excel.
The problem is that compliance is quickly outgrowing spreadsheet functionality. While spreadsheets were a good way to manage compliance manually, they cannot keep up with the automation based business systems of today. The regulations and laws that are drafted now are much more demanding, because regulators assume (in some cases even require) that tech solutions will be used to meet the increasing workload. This problem is not just limited to the finance sector – other industries are facing the same problems with compliance risk management through spreadsheets.
The use of GRC solutions means a whole new set of technical skills will be required in the compliance and risk departments. Businesses now need people with a broader grasp of technology and a background in IT. For a more detailed look at the new compliance technology initiatives being taken by banks read our white paper Top 10 Compliance Initiatives for 2018 in small to mid-sized banks and financial institutions.
Getting ready for the future of compliance
As a GRC solution provider we are aware of not just the amount of automation and technology being used in compliance risk right now, but also the pace at which it is increasing. It is clear to experts around the world that the use of technology in compliance will only increase as time passes. The benefits are too significant to be ignored and the associated technology costs are getting lower with the passage of time.
Increasing technology is not decreasing the number of compliance jobs. On the contrary, the need for compliance experts is growing however many businesses are reworking the job requirements and skill sets of compliance experts to emphasize tech skills. In large organizations management is aiming to bring in people with a computer science and data science background to augment the performance of other employees in the department. Smaller organizations are looking at training and qualifications they can arrange for their personnel to help them meet the growing and new demands of the job role.
While this change may be new for compliance risk management, similar changes have often happened in many industries at many different levels. Factories used to require only manual labor skills but as they became automated, they needed technically skilled labor. The same thing is happening to risk and compliance. The nature of the job role is changing. As compliance monitoring become almost completely automated the skill sets required for monitoring are diminishing in demand. Businesses are now expecting compliance risk managers to work on bigger ideas and projects, which require different skills.
A lot of organizations are now focusing on GRC education and training. This knowledge is essential for all compliance risk managers as well as C-level executive roles that directly intersect with compliance risk. These trainings are not necessary for all compliance employees yet. A big reason is that GRC is still a relatively new approach towards compliance and risk and is still growing. It takes some time for best practices to be found and industry standards to be created. Once we reach that point it will be important to educate and train every compliance and risk employee.
There is no need to wait until it is absolutely essential to see what such an approach can provide your organization. If you want to see why compliance risk technology is becoming so popular and what it can do for your organization simply get in touch with our team. We demo the technology and offer interested parties’ free trials of the American Bankers Association endorsed Predict360 Compliance Management system.
About the company
360factors, Inc. (Austin, TX) helps companies improve business performance by reducing risk and ensuring compliance. Predict360, its flagship software product, vertically integrates regulations and requirements, policies and procedures management, risks and controls, audit management and inspections, and on-line training and qualifications, in a single cloud-based platform based on artificial intelligence.