Automated Regulatory Compliance Management Trends for Banking and Fintech Services

When a new Fintech or any other entrant in the financial sector or existing companies plans to expand, one of the essential points to consider is dealing with regulatory compliance. The adherence to these management rules acts as either a business facilitator or a considerable hurdle.

Since 2019, the impact of the pandemic has impacted the way the financial sector operates and increased the need for automated solutions and innovations. Where the banks and Fintech companies have used their automated applications, their use will enhance in 2022 and the coming years.

Top Trends for Automated Compliance Management

Since compliance management automation has become a hot topic for today’s financial operators, various trends have emerged as regulatory compliance management solutions. Some of the most trending factors that companies can follow to make their compliance streamlined include:

Artificial Intelligence (AI) and Machine Learning (ML)

Data is the currency of the modern world, and Artificial Intelligence (AI)/Machine Learning (ML) runs on data. Besides data, what regulatory features can the financial sector leverage? Unsurprisingly, AI and ML have made their way into automated compliance management to handle large volumes of data and regulatory information easily.

AI and ML translate and interpret regulatory data into actionable information. However, they need guidance in learning the regulatory language to give the best solutions.

Bottom Line: AI and ML can efficiently develop and maintain compliance knowledge by creating high-quality digital rules for application.

Knowledge Graphs and Taxonomies

Knowledge graphs and taxonomies are the logical completion of AI and ML interpretation. By explanation, taxonomy is a process of describing information using standard vocabulary, and the procedure establishes a connection between various concepts and their alternatives to describe the same idea.

On the other hand, using knowledge graphs captures the information available and reorganizes it into usable data after removing complexities.

So, how important is this trend as a compliance automation tool for an organization? As mentioned above, knowledge graphs act as logical continuation and completion for AI and ML and bringing these together will create more automation capabilities. Not only do knowledge graphs offer high explain ability of information, but it also makes data schemas to increase ML’s learning capabilities.

Bottom Line: Knowledge graphs and taxonomies can make complex regulatory issues into simple yes or no answers.

Compliance Embedding

A new automation solution that has made trending headlines is embedding compliance. Regulatory technology such as Predict360 has evolved into more than “to-have” technology. Instead, it has become a business accelerator that offers value-added technologies and processes. Mature service providers and market experts have leveraged this trend to gain widespread acceptance.

The merging of regulatory change technology and its merger with business processes is possible due to embedded compliance. Companies have started to consider this trend to identify business opportunities, reduce risk, and lower operating costs.

Bottom Line: Embedded compliance features allow financial institutions to streamline regulatory and other implications within their existing software or digital channel.

Cross-Border Compliance Technology

The financial institutions that want a global clientele must follow an ever-changing list of regulations. They must manage and track a cross-border framework to ensure success actively.

Most companies in this domain usually gather data through traditional means such as email, phone calls, or memos. There is an enormous potential for automated compliance implementation when cross-border operations come into focus.

However, the major challenges in such operations are innovation, enabling growth, and a customer-centric approach despite the complexity.

Bottom Line: Embedded compliance can simplify all regulatory compliance issues worldwide.

Compliance with Data Privacy and Protection

With the emergence of the digitally connected business environment, data is everywhere. Where there is data, there is a chance of data theft and breaches. It becomes imperative for businesses to ensure adherence to data privacy and safety regulations.

Even with automation and innovations, businesses need to find out the patterns through which they can secure their data. For example, the use of RagTech has eased the use of regulatory compliance according to data and requirements.

Bottom Line: Strict adherence to data privacy and protection laws can secure valuable information and increase effectiveness in various regulatory topics.