3 challenges making regulatory change management bloody difficultPublished on 27th June 2023
Regulatory change management is a serious business. As the regulatory landscape continues to grow more complex, with greater volumes of published regulatory content, from new regulations, to standards, to guidelines, it’s becoming a bigger challenge for companies to keep up.
There’s been plenty of presentations at industry conferences, inferences from financial regulators and comments in end of year reports from financial firms commenting on how firms are or should recognise that an investment in the right regulatory technology (regtech) software solution can help them manage regulatory compliance complexity.
But while some are embracing and leading this trend there are still plenty of firms who haven’t yet realised the importance, or at least made an investment in, the technology to help manage regulatory change – which could put them at risk of falling behind their competitors, being hit with large fines or even failing altogether.
1. Regulatory inflation
There are a number of reasons for the increase in published regulatory content, but no matter the reason we see increasing volumes across multiple regulatory categories from the more traditional areas such as anti-money laundering (AML) to newer regulatory themes including crypto and digital assets.
2. Regulatory compliance risk is increasing
Regulatory compliance risk, or the potential impact of non-compliance, is also increasing rapidly as regulators become more aggressive in enforcing existing regulations while introducing new ones that require additional steps be taken by firms wishing to avoid penalties.
With the volume of published regulatory content growing, the complexity increases with regulations not aligning across jurisdictions or, where aligned, still containing subtle difference between the legislation in each jurisdiction. Many organisations struggle to keep track of all of their obligations, the overlaps, the subtleties, the preferred regulatory regime while seeking regulatory optimisation in this complex regulatory landscape.
The importance of complying with regulations has never been greater to avoid serious consequences for those within the financial services sector.
3. Recruitment issues
Recruitment can be challenge for all firms but consider the regulatory compliance function – this is a function that in all firms is going to require additional resources to handle the growth in volume of regulatory content. So, firms will have to consider how they can grow out regulatory compliance teams, requiring specialist skills, when their competitors are doing the very same. Where can these people be found? What training can be offered? How can technology help with manual tasks that could be automated, freeing up skilled staff for higher value work.
The solution? Technology. It can help firms understand evolving regulations, build a more consistent approach to regulatory compliance, manage their resources better and reduce regulatory compliance costs. But most importantly, technology will allow firms to improve their compliance outcomes because it’s important to both make money and at the same time correctly handle regulatory risk.
Technology can help firms understand evolving regulations and build a more consistent approach to regulatory compliance and regulatory change management.
A single, unified regulatory technology (RegTech) solution for managing regulatory change management helps firms better understand and handle evolving regulations and allows them to build a more consistent approach to regulatory compliance and regulatory risk.
For further information on a solution specially designed for this purpose please [read more] or get in touch.