The Challenge
- As regulations / standards are changing, the scope of regulatory focus continues to expand. It warrants a more structural answer that will allow banks to effectively and efficiently manage policies, procedures, documents and disclosures process – manual mapping of regulations to policies, procedures, loan documents, disclosures and then updating your policies and procedures to meet the regulatory requirements is daunting task if done manually.
- The traditional regulatory compliance model was designed in a different era with a different purpose in mind underlying risk exposures with respect to how to practically translate regulatory requirements into management actions. As regulatory compliance is becoming more complex, managing regulatory change and action plans through manual or multiple systems could become a risk factor due to the possibility of increased human error rates.
- With the increased applicability of multiple regulations, how to communicate the changes and the translations of the regulations to the rest of the organization so people are not caught off guard is another major challenge for the banks to overcome.
The Solution
- As some banks continue to struggle with new regulation such as BSA/AML, CRA, HMDA, Flood and CFPB to name a few, banks need to implement a regulatory change management software based on artificial Intelligence (AI) with Regulatory Intelligence Library with common taxonomy and centralized for multiple departments
- Implement a robust regulatory compliance software based on artificial intelligence technology which can automate the mapping of your banking policies & procedures with regulations and to your internal controls. As the regulations change it triggers an alert or assigns a task to a specific user base.
Value
- Automating the process of mapping regulations such as AML/BSA, FCPA, CFPB and HMDA etc. to name a few to internal controls helps build internal consensus around internal controls library and a common taxonomy which is hard to achieve through manual or home grown non intuitive legacy tools such as word, excel, access, SharePoint that were designed for an era of non-complex regulatory environment
- Consistent and repeatable compliance process driving operational efficiency, reduce cost and increasing quality
- Automation of regulatory change management is highly efficient. It reduces waste, increases quality of data and reduces cost through redundant tools and additional head count which can be re-allocated to high value risk and compliance functions.
A Case Study
Challenge: A $3B bank who is into multiple products used Thompson publishing subscription for their regulatory feeds, used share point for their policies and procedures and outlook to push polices for review and approval and used email to assign tasks. This is how they addressed their regulatory change management. Their challenge was that their current solution was not able to push the regulations and its translation through the company, they had no way to distinguish between previous vs current regulations, did not have the ability to map regulations to policies and procedures or to internal controls since they were using three different non-integrated systems.
Solution: Because predict360 regulatory change management module is built on artificial intelligence (AI) technology, we were able to demonstrate how to create a centralized regulatory library with consistent taxonomy, concept map of specific lending regulations to lending policies & procedures, lending documents , disclosures and to internal controls, automate the translation of the regulations as well as create an applicability of regulations process as to which regulations apply to which location, branch or even an asset.
If you would like a complimentary 60-minute advice on Automating Regulatory Change Management or would like for us to do a proof of concept for, please contact us
