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Banks are counting on technologies to conform to the ever-changing regulatory compliance.
FREMONT, CA: Financial institutions are experiencing a proverbial storm when it comes to the issue of regulatory compliance. As issues of financial fraud rise, regulatory authorities are coming forward with stringent norms to prevent escalating risks across the banking sector. Technology is proving to be a major enabler in helping banks rise to the occasion and deliver compliance goals. Among banks, the demand for technology-backed compliance management is such that, there has been the emergence of Regtech companies. Banks leverage digital solutions developed by regtech companies to make regulatory compliance convenient.
Banks are facing a host of challenges with the rapidly evolving regulatory norms. The entry points for data have multiplied, making it difficult for banks to regulate data flow, or assess the vast volumes of information that pass through the systems throughout the day. The multiple channels of accessing services have also created difficulties in producing single customer identities, which makes legacy authentications processes insufficient. Software solutions that are conventionally used by banks to monitor suspicions are prone to frequent false-positive alerts, resulting in inefficiencies. Mandatory processes which are effort-intensive are error-prone, resulting in compliance complications. A bulk of these problems can be solved with the effective use of tools from regtech companies.
Advanced technologies have the potential to streamline banking processes and align them to facilitate regulatory compliance. Digital data management solutions effectively sort through data, enable tagging, and deposit them in digital repositories. The elements of transparency that such solutions bring are crucial from the perspective of compliance. With AI and ML, regtech solutions have enabled intelligent and automated monitoring capabilities that are less affected by false alerts. Auditing and reporting capabilities of regulatory solutions have also improved, resulting in highly insightful reports.
Together, these technological capabilities are adding an analytical edge to banking firms’ strategies for regulatory compliance. The self-learning engines driving the regtech solutions are also capable of responding to changes in the regulatory frameworks, ruling out the need for banks to modify or replace existing capabilities.
Also see:- Top RegTech Consulting/Services Companies