The Future of Compliance Solutions

Compliance management is quietly undergoing a change. This change began a decade ago and the pace of the change is steadily accelerating. Compliance management was a fully manual process. The organization depended solely on the vigilance and productivity of the compliance personnel to ensure the highest possible levels of compliance. Organizations are now automating as much of the process through compliance solutions as they can because it allows them to achieve higher levels of compliance than what was possible with manual means of management.

From Chaos to Control

The past few years have seen rapid technological developments which made it hard to predict what direction the industry would take. The technical capabilities of a new technology and its practical applications are not always the same. The internet is the perfect example – ecommerce began in the early nineties. Amazon.com went live in 1994 and it was nowhere near the first ecommerce website. Even though ecommerce began to take shape in the early 90s, we didn’t see the real potential and adoption into society until the early 2000. It then became clear what shape ecommerce would take in the future.

Whenever a new technology comes to the horizon there are many rapidly different offerings on the market. It takes time for the truly successful methods to come out on top and they are then adopted by the rest of the industry. Compliance solutions have reached this part of the technology lifecycle. It was hard to tell how GRC would affect risk and compliance a few years ago because there were many competing technologies and methodologies looking for dominance. A decade of testing, experimentation, and experience using GRC systems in real world applications has made these best practices clear.

The Increasingly Important Role of Machine Learning in Risk and Compliance Solutions

One of the most important breakthroughs in compliance and risk has been the advent of machine reading through natural language processing. Natural language processing is an important facet of the future of computing. Historically we have always had to train ourselves to give commands to the computers in terms computers can understand. From coding to sending out an email – we must click, type, and make things understandable for machines. Natural language processing aims to instead train computers to understand the way we talk. We can already use basic natural language processing in our phones. The option is available under the name of Siri in Apple, Google Assistant, and Cortana in Microsoft’s devices. These digital assistants understand the questions we pose to them and answer accordingly.

The computing aims of natural language processing are much higher than simple phrase recognition or digital assistants. If computers are taught to understand to read and write in human languages our capability of processing, storing, and generating information will take a giant leap forward. The advantages in risk and compliance solutions alone will be staggering.

The problem with handling compliance management manually is that it involves reading, understanding, memorizing, and implementing rules, laws, and regulations that are very complicated to understand. The number of clauses, sub-clauses, conditions, amendments, and updates are hard to keep track of manually. The workload is enough to overload any person responsible for risk and compliance, but computers can easily handle the workload.

The Giant Leap in Productivity and Efficiency

It is easy to estimate how much of an increase in productivity and efficiency we will see when natural language processing is fully ready for use in risk and compliance solutions. We have seen a similar change in the financial industry with the use of spreadsheet software. The first spreadsheet software was called VisiCalc and it was released back in 1979. While it may seem laughably limited now, the ability to store and edit numbers in spreadsheets was revolutionary. VisiCalc ended up being considered the first killer-app for computers. Many organizations bought their first computer system to use VisiCalc. After VisiCalc we had Lotus 1-2-3 which dominated the market when DOS was the dominant operating system. Then came Microsoft Excel quickly became the dominant spreadsheet application.

Compare the capability of Microsoft Excel to work with numbers with the ability of people to work with numbers using papers and pens. A spreadsheet in Excel can instantly apply formulas to hundreds of thousands of data cells, process information, generate results, and much more in a few seconds. If we tried to do the same work manually it will end up taking days instead of seconds and the accuracy of the work will be significantly lower.

We didn’t see the same boost in natural language information because while numbers were easy for computers to understand there was no way for a computer to understand natural language. New systems use neural computing (computing models designed after the human brain) for rudimentary natural language processing which is already providing benefits. Our own solution, the Predict360 Change Management Software module, can parse documents based on keywords and extract important information.

The technology is new and once natural language processing technology improves, we may see machines handling all risk and compliance related activities. We have offloaded all data processing work to computers in almost every industry in the world and we can expect the same to happen with information processing once information becomes readable for machines.

The Road Ahead

The future of risk and compliance solutions depends on advances in technology and will be very different from the present ways of handling risk and compliance. Some innovators are also thinking about meeting machines half-way. Instead of waiting for machines to be smart enough to read and understand laws and regulations some governments are suggesting that we should design laws and regulations to be machine readable to increase the pace of automation.

Automation is the perfect solution for increasing efficiency and productivity, which is why the Predict360 Compliance Management Software module automates many different compliance-related monitoring, scheduling, and management tasks. To see the benefits automation can bring to your organization get in touch with our team for a demo as well as a month-long trial of our American Bankers Association approved compliance solutions.

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.

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