How Technology Helps in Managing Regulatory Examination

As regulatory examinations get more sophisticated with time, compliance teams must quickly and thoroughly prepare for the exam. After all, unfavorable investigative findings may have far-reaching effects. The credibility of an organization with the financial system’s sentinels may be endangered. Additionally, the organization may face severe penalties or fines, lose face with investors and clients, or, in the worst-case scenario, be prohibited or suspended from the industry. This highlights the importance of financial firms stepping up their game and conducting due diligence before facing an examination review.

Regtech solutions focus on solving the problems and obstacles faced by businesses operating in heavily regulated industries. Since regulatory exams are such a critical part of the regulatory framework, many modern Regtech solutions have dedicated modules to help businesses with regulatory exams.

Preparing for the Regulatory Examination

Businesses know how important it is to prepare for a regulatory exam. Regtech solutions make preparing for regulatory exams easier for all the stakeholders involved. When regulatory agencies perform an audit or an exam, they are not simply looking for mistakes that have been made. The regulatory bodies aim to ensure that all the businesses operating within the industry have the proper controls and mechanisms in place. The regulatory agencies understand that every company will make mistakes; therefore, businesses need to have the right mechanism to catch those mistakes and correct any fallout.

It can be challenging to demonstrate the effectiveness of the regulatory compliance framework operating within the organization. Businesses must collect documentation and prepare all stakeholders to explain their role in the regulatory framework and demonstrate their effectiveness. Regtech based solutions make this step very easy for businesses because the regulatory framework exists on the digital Regtech platform. Businesses do not have to prepare the documentation to show the regulators that they have a mechanism in place to catch compliance violations and risk issues – they can show the mechanism operating on the Regtech platform.

Getting Everyone on the Same Page

When an organization receives a regulatory exam notice, it needs to immediately create a plan for the exam. All the stakeholders involved need to be told about what is expected from them for the exam and what their role is to play in the exam. This can be difficult for many organizations. The usual SOPs are to have a meeting where all the requirements are communicated, and then follow-ups happen through emails, calls, and further meetings.

Regtech solutions make it very easy for businesses to communicate all examination requirements and roles to stakeholders immediately. The team responsible for the regulatory exam initiates the planning on the Regtech platform. Tasks are created, and milestones are set. Each stakeholder is assigned the tasks and reports that are required from them. When the stakeholders complete their tasks and upload documents, the platform automatically moves the process to the next step.

This also makes it very easy to manage the whole process. Instead of manually keeping a tab on every stakeholder and all tasks involved, the regulatory compliance team has a real-time view of all activities associated with the regulatory exam. They can see which tasks are progressing on time, which tasks require their intervention, and the comments or feedback left by any stakeholder.

Creating Reports and Collecting Data for Exams

There is often a rush to ensure that all the reports that the regulatory bodies will require are ready for the exam. Data must be collected from multiple sources for reports. The data also needs to be verified because any report presented to the regulatory body must be as accurate as possible. This is another part of preparing for a regulatory examination that is simplified by Regtech platforms. Modern Regtech platforms can generate reports whenever needed and provide real-time information about the regulatory framework. There is also no need to collect and standardize the data for reports – all the data required for the exam is already on the Regtech platform being used throughout the enterprise.

Managing Issues and Findings

Once the exam is over, the regulatory bodies highlight the issues they found in their findings. The organization needs to work on the issues and findings and demonstrate its commitment to ensuring compliance. Managing issues is much easier on a Regtech platform. There is no need to send out emails, keep track of all issues manually, and follow up to ensure that all issues have been mitigated. The regulatory compliance team creates tasks for all the findings and assigns them to the relevant stakeholder. They can then follow up on the progression of these tasks from within the Regtech platform. They can even show the regulatory bodies all the actions taken based on the findings within the Regtech platform, thus demonstrating that they have put in place the changes requested by the regulatory bodies.

Such features also make it easier for businesses to have a credible image in the eye of the regulatory bodies and customers. Interested in seeing how your organization can get better results from regulatory exams? Get in touch with our regulatory experts for a demonstration of the Predict360 Examinations and Findings Management solution.