Regtech is “a subset of fintech that focuses on technologies that may facilitate the delivery of regulatory requirements more efficiently and effectively than existing capabilities.” UK Financial Conduct Authority, 2015
A recent survey by Thomson Reuters, “Cost of Compliance 2022: Competing Priorities”, highlighted the need for technologies to step in to help plug some of the gaps in compliance functions. Increasing demands from the top, coupled with challenges arising from both the pandemic and sanctions imposed in response to the war in Ukraine, have left compliance functions running to catch up and with an ongoing lack of resources.
The survey, which collated responses from 500 compliance practitioners across all financial sectors, clearly showed that the future of compliance is data and technology-driven. Last year’s report showed that respondents hoped the compliance function would be more integrated throughout the business, this year’s expectations have grown with the ideal future now seen to be full integration throughout the business. This will be hard to achieve without embracing the opportunities offered by regtech.
Compliance teams are increasingly being called on to oversee a broader range of compliance issues covering diverse topics such as crypto assets, fintech, AI, third-party management, operational resilience, and cyber security. But this increase in demand is not always met with an increase in resources. Instead, compliance functions are having to find ways to do more with less. The survey found that this is encouraging financial services firms and their compliance functions to move towards a more automated environment and embrace digital transformation to meet the growing demands of the business and ensure compliance is achieved and maintained.
The compliance industry is suffering from a lack of resources in general as firms compete over talent to ensure they meet the requirements needed to achieve compliance. This coupled with the shift towards hybrid working has made the need for firms to evidence that they are meeting all the regulatory requirements both more essential and more challenging. Embracing regtech will be key for compliance functions to overcome these challenges by working with providers to ensure the technology continues to evolve and become more sophisticated to meet the needs of the industry.
PeopleClear SMCR uses innovative technology to simplify SMCR for HR and compliance functions. Using a solution that can be tailored to the needs of your organisation, the system can help to integrate the compliance process across the whole organisation. The effective use of regtech, like PeopleClear SMCR, means processes can be automated and resources freed up, allowing compliance teams to focus on more complex aspects of their role. Regtech can also help to ensure that compliance processes are worthwhile, effective, and add value to the business rather than slipping back to a time when compliance was a performative tick box exercise.
Read the full Cost of Compliance 2022 report or find out more about how PeopleClear SMCR can help you to manage your compliance.