FinTech offers the opportunity for financial companies to greatly improve the efficiency of a variety of corporate functions.
For example, leveraging machine learning powers automated trading, allowing human traders to focus on more value-added tasks. Additionally, using AI provides a similar efficiency boost by using chatbots on initial customer service requests.
However, all these technological advancements to corporate processes potentially add a measure of complexity to corporate compliance. On the other hand, some tech innovations might actually even make compliance easier and more effective. So let’s take a high-level overview of compliance in a financial world increasingly transformed by FinTech.
How Can You Manage Compliance in the Modern FinTech World?
The Emerging State of The Art in Compliance
It appears the FinTech revolution offers financial firms a significant opportunity to reengineer the process of compliance itself. Notably, a recent poll of finance companies noted half of the respondents plan on implementing analytics for compliance. Other businesses surveyed hope to adopt robotic process automation (RPA) and augmented intelligence for this purpose. This survey reveals the impact of the FinTech revolution actually transcends standard back-office functions.
As far as what compliance functions benefit the most from process improvement, companies need to look at monitoring and testing. Both remain manually-intensive tasks ripe for the application of RPA. Like with other AI and automation use-cases, expect a significant increase in both efficiency and productivity. Compliance employees then gain the ability to concentrate their efforts on analysis and remediation.
Strategies For Implementing Compliance Technology
Like with any other emerging technology, adopting AI and automation in compliance requires a discerning approach. Start with a pilot project aimed at improving the efficiency of a specific function. So try to find a manual task ripe for the benefits of process automation. Include members of your compliance team on any initial project analysis, as their experiences offer significant value.
As noted earlier, compliance monitoring and testing offer a significant opportunity for operational efficiency improvements because of RPA. In fact, one financial company automated its compliance testing function. What used to require 100 person-hours each month is now handled by a bot in 15 minutes. Expect that kind of productivity increase to get noticed by the executive team!
With a successful pilot project, the project team then gains the opportunity to transform the entire corporate compliance department. Data analytics also comes into play, providing financial companies with a quick, holistic view of their entire compliance risk.
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