Digital compliance for key business processes

November 6, 2018 | Financial services

Businesses are transforming processes to become digital to meet customer expectations and improve the speed and efficiency in which services are provided (e.g. online customer onboarding, payment, fraud detection, automated customer loan adjudication). In addition to transforming processes to meet customer expectations, changes to business processes are required to address new and evolving regulatory requirements to ensure timely identification of potential instances of non-compliance. While many compliance functions rely on risk-based independent testing of key business processes to assess compliance with regulatory requirements (e.g. anti-money laundering (AML)) onboarding processes, transaction monitoring and trade surveillance rules), there is an opportunity for the business and compliance to partner and embed regulatory compliance requirements in front-line digital processes and automatically monitor ongoing compliance.

Embedding compliance requirements in front-line digital processes have a number of significant benefits:

• Real-time identification of non-compliance and prevention of potential compliance issues e.g. use business decision management to translate sanctions screening requirements into the logic that can block or escalate payment transactions in real time can be extended to fraud and other use cases
• Cost reductions by automating repetitive manual activities e.g. accessing multiple products and know-your-customer source systems to:
  • Collect transaction history to support AML enhanced due to diligence review or
    
  • Support loan adjudication processes
• Seamlessly integrating compliance in the customer experience

An effective partnership between the business and compliance requires the compliance function to follow the business’s lead and become ‘digital’—integrating digital capabilities into the compliance function. This includes:

• Talent transformation: Transforming the compliance talent profile to support digital capabilities. This includes employing tech-savvy compliance professionals who understand emerging technologies and partnering them with compliance subject matter experts to enable job shadowing and knowledge sharing.
• Innovation partnerships: The business and compliance function can develop many capabilities in the house (e.g. an implementation of robotics process automation), but should actively identify technology providers who have capabilities that can enable the compliance function to deliver significant value. We have observed examples of innovative technology capabilities e.g. 360 customer view—developing a single, enterprise view of a customer from multiple disparate source systems and automatically screening the customer against third-party databases to enrich customer data.