Understanding the value of enterprise compliance technology

Abstract

The increasing costs and complexities of compliance and the intensifying competition for financial professionals and compliance staff are pushing financial services firms to adopt regulatory technology. The RegTech market has expanded from 150 vendors to more than 400 within just four years as firms seek effective and efficient solutions to their compliance and regulatory needs. Firms reduce regulatory risk and increase operational efficiency by replacing manual processes, internally built systems, off-the-shelf software that has been modified for compliance needs or some combination thereof, with built-for-purpose, integrated enterprise solutions for needs such as licensing and registration, conflict of interest disclosure review and administration, oversight and risk management and supervisory policies and procedures. However, some firms have difficulty ascertaining an accurate return on investment in enterprise technology because of the challenges involved in identifying and considering all of the benefits of an integrated platform and the culture of compliance that it creates. Although returns such as cost savings and productivity gains can be measured rather easily, benefits such as fines avoided and a reputation for strong compliance are often harder to quantify. To understand the value of enterprise technology, a firm must evaluate its effectiveness and efficiency in meeting a firm’s regulatory and compliance needs and assess the impact that it makes in recruiting and retaining top talent by offering an experience that emphasises ease of use and the elimination of manual tasks. This paper offers a detailed look at quantitative and qualitative benefits that a firm should consider in evaluating the effectiveness, efficiency and experience of a builtfor-purpose enterprise compliance and licensing platform.