2022 was without doubt a very challenging year for compliance professionals.
The regulatory landscape continued to broaden, both in terms of the number of regulations and the sectors coming under scrutiny by the authorities.
There was the vast swathe of sanctions imposed on Russia by the West, the increased focus on politically exposed persons following the publication of the Pandora Papers, the ongoing debate about corporate transparency, not to mention the challenges caused by the changes in working practices following the lock down.
Against this backdrop, Thomson Reuters released its Cost of Compliance Report 2022. It revealed the stark news that despite compliance’s widening duties budgets remain tight and staff numbers are unlikely to grow, resulting in a widespread belief that existing personnel will be expected to ‘do more with less’.
2023 is set to be even more challenging
One of the key concerns will be the state of the economy. Fiscal fragility, soaring inflation, and the resultant social unrest may well lead to some governments seeking additional revenue sources in the form of corporate taxation, export controls, or supply chain mandates.
As the economic situation deteriorates alongside increasing intolerance, enforcement agencies may find themselves under pressure to take even greater action against firms that break the rules.
All this regulatory uncertainty and complexity simply adds to the heavy burden of compliance teams, who are already being pulled in multiple directions, with ever-increasing expectations and ever-shrinking budgets.
The hard truth is that in 2023, compliance professionals will be required to ‘do even more, with even less’.
How compliance teams can cope with the added pressure, yet ensure compliance at all times
The answer lies in replacing outdated manual processes, such as spreadsheets, and email-based communication with fully automated technologies.
Automation eliminates these time-consuming and resource-intensive processes and immediately streamlines your entire compliance framework, resulting in far greater efficiencies.
We fully realise that at a time when many organisations are looking to tighten budgets, persuading the people who hold the purse strings to invest in new technology requires a solution that not only improves efficiency but also reduces overall cost.
So, with this in mind, below is a list of the key benefits that will come with this investment and how it will pay off, both operationally and financially, over the long term.
The many operational and cost-saving benefits of automating the compliance process
- You need only pay for the services that you need.
The flexibility of the latest automated solutions means that the cost is proportionate to the requirements of each individual organisation. As a result, you can choose from a solution that evaluates the risk of a handful of customers, right through to a comprehensive onboarding and screening solution that mitigates the risk of millions of customers on an ongoing basis.
- Fewer staff, working more efficiently
One of the biggest costs in any compliance programme is the personnel entrusted with managing it. Through automation, an organisation can reduce the need to invest in additional personnel as it requires fewer people to cover more ground. As a result, you’re able to put your resources to better use and focus on more important matters such as enhanced due diligence (EDD) for those customers or entities that have been flagged as high risk.
- Attract better candidates when you do need to hire
Compliance staff are in high demand, making it difficult to attract personnel with the right experience, particularly in areas that call for specialised skills, such as crypto and ESG. A streamlined automated system is far more likely to attract the best candidates when they see that you have an intelligent intuitive solution designed to make their work easier.
- Accelerate the completion of repetitive tasks
As any compliance professional knows, much of the work entails a great deal of repetitive, menial tasks that are laborious, and extremely time-consuming. By automating the majority of processes, it helps drive agility, efficiency, while improving overall accuracy.
- Less human error and oversight
It’s the laborious nature of manual work that often leads to error. Automating your compliance processes greatly reduces the possibility of human error or oversight that could compromise your organisation’s compliance position; errors that can prove costly, both in the form of punitive fines, subsequent regulatory scrutiny, and damage to the standing and reputation of your organisation.
- Improved collaboration between colleagues
Any automated solution will not only provide a single source of truth, but will greatly simplify the assigning of tasks among team members. Furthermore, colleagues will be able to provide status updates, share documents, and exchange information from within the system. Vital information is no longer scattered across your organisation or hidden away within silos, and team members will no longer have different versions of the same documents.
- Simplify the tracking of regulatory changes
With regulatory bodies frequently updating rules and standards, staying abreast of developments, and ensuring you incorporate them into your compliance strategy can be challenging. A fully automated solution will help you to keep a close eye on these developments and proactively track both internal and external regulatory changes. In addition, it identifies non-compliant processes and operations and helps you to map new regulations and standards more efficiently.
- Greater visibility into ongoing performance
An automated solution can provide senior managers and administrators with a fully holistic view of compliance performance across the entire organisation, through the delivery of customisable reports and real-time dashboards. Features such as these provide unprecedented clarity and full visibility into the status and performance of the overall compliance landscape.
- Better auditing and reporting
With automation the level of risk across the entire business is now fully catalogued and visible to all authorised personnel. As a result, it can be used to demonstrate to any regulatory bodies that your organisation is taking all the necessary steps to screen for potential risk.
- Simplify customer review and remediation
The process of validating and updating data for large numbers of customers can quickly overwhelm compliance teams and create huge bottlenecks. A highly effective automated KYC remediation solution will utilise intuitive engagement tools and world-class data sources to dramatically reduce manual effort and time to completion. Furthermore, it saves cost by avoiding having to parachute in expensive outside resources to cope with any backlog.
- Consolidate your tech stack
A 2022 survey of 485 compliance professionals from across the world revealed that nearly two thirds of compliance professionals are using 2-3 tools when onboarding, with nearly 18% saying they use as many as 4-5 tools. By consolidating your tech stack into a single automated solution, not only will it remove the burden over whether different tools can work together, you can operate your entire system under a single licence, thereby reducing administrative complexity and saving you the cost of renewing multiple licences.
- Improve customer satisfaction
Last, but by no means least, a fully automated solution massively streamlines the onboarding and screening process, helping to keep customers happy and speed up time to revenue. It also helps your organisation demonstrate its commitment to the improvement of processes in accordance with set regulations that are there to help prevent financial crime, which is ultimately benefits everyone involved.
How we can help
To discover how RiskScreen can help you to implement an automated solution that will reduce the cost of compliance in 2023 and for years to come, request a discovery call today.