Technology is causing a seismic shift in the business models of the banking industry, underscoring the importance of understanding compliance risks through increased visibility into their critical business data. The growing adoption of the cloud, social media, and mobile technologies, along with changing consumer behaviors, places the onus on compliance professionals to adapt their risk management programs or risk being sidelined by disruption.
Changes to Banking, Insurance, and Capital Market Firms
A recent Accenture report – sampling compliance officers at 150 banking, insurance and capital markets firms across the Americas, Europe and Asia-Pacific – revealed that compliance function investment is accelerating, with 76% of respondents expecting a total increase of at least 10% in the next two years. In addition, 80% of respondents predicted that new banking business models will force those in leading compliance roles to rethink the function’s operating model and capabilities required to execute change.
41% of compliance officers surveyed count technology trends as a key skill among those they should possess as a competitive advantage.
Leveraging Automated Tools
Compliance officers can leverage automated tools to gain visibility into potential issues and thwart risks before they become significant and impact operations negatively. Critical data controls can ensure data quality for incoming and outgoing information while masking delicate fields to adhere to privacy standards. Overseeing critical data with proper controls can safeguard it as it moves throughout the enterprise, and software designed to track data flows, sensitive data in particular, will improve operational efficiency and the accuracy of records – incredibly valuable for compliance reporting and continuous improvement. Financial Institutions that invest in big data and analytics solutions are better able to access correct, current, protected, retained, sufficient, timely, valid and verifiable data generating critical early warnings and predictive insights to better measure business performance and related risks.
Detect Risk with Compliance Standards
In order to fully grasp the landscape of a financial institution’s risk potential, compliance officers must implement compliance practices to properly detect risks as the market and associated technologies evolve over time. In this case, knowledge definitely is power – and the right technology is more important than ever to understand and leverage throughout the process.