How RegTech Is Reshaping Compliance Programs Today

As technology evolves and awareness of the operational impact on industry frameworks and societal concerns shifts, the greater the need for regulatory oversight becomes. These rules are expanding rapidly to keep pace with the rest of the world, forcing compliance teams to adjust to the changes. The global financial market is just one example, with anti-money laundering (AML), data privacy, and ESG disclosures evolving almost every quarter. 

The cost of maintaining regulatory compliance is only increasing. Deloitte reports that operating costs spent on compliance have increased by over 60% for retail and corporate banks. In some cases, larger banks are spending over $1 billion annually to meet these standards. That is why RegTech solutions are crucial for a modern organization to have resilient operations with efficient, cost-effective solutions. 

The goal is to integrate compliance management automation and real-time regulatory reporting into existing operations. That allows businesses to keep pace with any new regulations, without slipping behind competitors and losing market share.

Why Compliance Needs a Technology Overhaul

The financial sector is an excellent example of why regulatory compliance obligations are shifting. Leaders see the writing on the wall that traditional approaches using manual reporting, spreadsheets, or siloed workflows will not get the job done anymore. The factors of human error and legacy data cleaning prevent such methods from effectively meeting current regulatory compliance requirements. 

As standards change, a more flexible system must be activated. One that ensures audit readiness, keeps costs under control, and helps ensure compliance. RegTech accelerates this process by creating a more agile system of governance. Instead of a reactive and labor-intensive expense with regulatory reporting, companies achieve a proactive, highly efficient result that is less prone to errors.

Key Capabilities of RegTech Solutions

While there are many advantages to adopting RegTech solutions, three critical aspects of integration are fundamental in helping organizations meet evolving standards. 

Compliance Management Automation

RegTech automates many of the routine tasks in an organizational framework. That may include KYC onboarding, customer due diligence, sanctions screening, and regulatory rule mapping. Instead of this taking forever with manual labor, everything runs in the background. 

A recent study in the Journal of Banking & Finance highlights how such automations reduce compliance time checks by up to 70%, including boosting accuracy rates from 80% to well over 95%. Having such a support system ensures that compliance officers can focus on other essential activities, such as interpreting regulatory guidance or advising senior management, both of which are necessary with ever-shifting standards. 

Real-Time Regulatory Reporting

Another capability of regulatory reporting through RegTech is that it doesn’t take the weeks or months of previous manual systems. Batch data reconciliation becomes faster and more accurate, streamlining reporting in a stricter regulatory climate and reducing “lag” vulnerabilities. 

Most modern RegTech platforms offer real-time notifications and active, around-the-clock monitoring to reduce risk exposure. In the same journal article, AI-driven monitoring tools were reported to reduce timeframes from seven days to less than two when it came to reporting. That type of efficiency leads to greater transparency and responsiveness if a company is targeted by oversight. 

Lowering the Cost of Compliance

Finally, proper RegTech solutions lower the cost of compliance. Instead of a ballooning budget hitting 10 to 15% of total expenses, modern solutions bend the cost curve downward. Automation reduces the workforce or frees it up for other tasks, without sacrificing quality and accuracy. 

Fraud detection alone is one consideration. Anomaly recognition is another. These two aspects account for nearly a quarter of global RegTech spending. As the average cost of adopting RegTech is less than the funding spent on prevention for these two areas, firms are rapidly getting on board to lower future risk from fees and inefficiencies competitors are gaining, not to mention the danger of non-compliance.

GRC Platforms Evolving to Meet Regulatory Complexity

It’s clear that the primary goal of most RegTech platforms is to ensure automation. However, a broader trend is emerging, one of integration into enterprise-wide governance frameworks. GRC platforms are being leveraged to combine governance, risk, and compliance into a unified architecture. 

When you introduce such frameworks into a business, leaders benefit from real-time dashboards with easy-to-understand reporting. Intelligence feeds are sent across different sectors of a company, ensuring everyone is up to date on the new standard. All these automated workflow tools help create a culture of more audit-ready capability. Silos get broken down, and a single source of “truth of risk” is generated. 

The GRC platform market is expected to grow nearly double in value by 2034, reaching a total value of $152 billion. Organizations are realizing the power of shifting views on compliance from fragmented, department-specific tasks to a centralized, enterprise-wide philosophy. 

Having GRC platforms and real-time monitoring through tools like Pirani allows for integrated frameworks that are faster, cheaper, and more resilient than traditional methods. The simplified oversight workflows and automated monitoring alone offer significant competitive value for any business or firm.

Examples of Successful RegTech Implementations

The measurable impact of any RegTech solution becomes much easier to see when it is put into practice. For example, the PoxyMity IPO communication platform is actively being used in today’s Hong Kong Stock Exchange. That ensures greater shareholder disclosure, saving the expense of thousands of manual filings and accelerating compliance checks, which fosters greater market trust through transparency. 

The Bank of England is another example. Their recent report on collaboration between the City of London Corporation and its dual initiatives, including the creation of a customized RegTech Platform (through a joint initiative with Innovate Finance) and the public reporting of all results, has generated greater trust in key financial, operational, and social systems. 

AML is another big concern. In the 2021 Deloitte AML/CFT RegTech Report, case study after case study was used to demonstrate how implementing complete compliance management automation systems and frameworks saves the industry time, money, and lowers the risk of expanding fraudulent activities. That is why 90% of retail banks are making the change.

How to Start Modernizing Compliance Programs

The path to full RegTech integration is not as complex or expensive as many firms might think. It doesn’t require a full system overhaul, but a gradual integration that identifies manual bottlenecks, redundant workflows, and areas most vulnerable to oversight scrutiny. 

These automations can be brought in section by section, using actively reported metrics to determine where the next implementation will bring the most value and compliance. That is even more beneficial when RegTech includes a full GRC platform to consolidate alerts, unify dashboards, and place all audit trails into a singular framework. 

Organizations seeking such developments should make continuous improvement a cornerstone of adoption. That will allow adaptation to become part of the company culture, ensuring that when onboarding begins, the day-one thought process is one of resiliency instead of stubborn adherence to antiquated methodologies. 

The fact is, the future of RegTech and compliance is only expanding. New rules are being implemented too quickly for most businesses to manage without some help from an AI-backed framework for automation. There are gaps when the SEC, FCA, ESMA, and other regulators “come to call.” Utilizing digital frameworks that can rapidly adapt is crucial for addressing escalating costs, environmental risks, and competitor integration.

Compliance as a Strategic Advantage

Firms are waking up to the value of RegTech solutions. The ability of such frameworks to reduce costs and deliver real-time visibility into risk exposure is a benefit that no organization can ignore. Instead of viewing these necessary changes as hindrances to core functions, they should be considered a strategic advantage for doing business in the modern era. Bringing in compliance management automation to strengthen regulatory reporting while also gaining the cost, time, and function benefits from a complete GRC platform turns compliance into a proactive advantage. 

Tools like Pirani empower compliance teams by centralizing oversight, creating efficient workflows, and staying one step ahead of evolving standards. Investing in such systems now builds the resiliency and agility a business needs to thrive in tomorrow’s even stricter regulatory environment.

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