The Challenge of Compliance: How Technology Can Help

By Andy Botrill, VP EMEA

An ever-changing and increasingly complex operating and regulatory environment means that large organisations are under more pressure than ever to meet expectations around audit and control management. The responsibilities and risks that must be managed are rising all the time, resulting in employees being overstretched and errors falling through the cracks.

The current political situation in the UK is causing further uncertainty. Brexit is being discussed left, right and centre, but we don’t yet know the true extent of its impact. We can assume that – if or when it goes ahead – it is going to complicate the regulatory landscape further, meaning companies must ensure their audit and compliance processes are tried and tested. In the UK, there have also been several major reviews into the audit industry that have resulted in immense scrutiny by industry watchdogs. This has shifted public perception considerably; any financial mistake could now result in significant reputational damage that will be difficult to shake off.

However, keeping on top of financial processes is not always a straightforward task – regulations are constantly evolving, which can make businesses feel like they are always one step behind. But, with the help of technology, they can overcome the challenge of visibility and centralisation that so many finance and compliance professionals struggle with.

The challenges around compliance

Compliance can be extremely challenging when reams of data, documents and reports are involved. However, ensuring a business is operating in accordance with laws, regulations, standards and ethical practices is integral to its success.

Traditionally, a large number of financial processes have been performed manually, and whilst some processes have been automated, many still require human assistance. If we take a look at fraud detection as an example, automated systems are used to identify potentially fraudulent activity. But employees still need to look through the information provided and determine if fraudulent activity has actually occurred. This is of course highly time-consuming and potentially subjective, leaving a large margin for human error. Coupled with the increased workload many financial professionals are facing, concerns around accuracy are no surprise.

The good news is that technology can make a real difference when it comes to accuracy, visibility and productivity. But, if the technology itself is not managed properly, issues will still crop up. Finance, like many sectors, is currently facing a skills gap. There is a real need for experienced, qualified finance professionals who also possess the right technical and soft skills to master, implement and train teams to use new technologies and processes effectively.

Era of automation

With developments in artificial intelligence (AI), machine learning (ML) and cloud computing, technology is encouraging organisations to re-evaluate how compliance can be achieved. Intelligent systems can be utilised for a wide range of processes, meaning there is no longer an excuse for not being compliant.

The right technology can have a profound impact on compliance initiatives. It can provide best practices, workflow management, data structuring and risk mitigation systems, to name a few. Cloud-based solutions provide a central repository for compliance documentation, demonstrating a holistic view of entire projects in real-time. This allows for total visibility over control effectiveness.

Robotic Process Automation (RPA), for example, is allowing audit and compliance departments to simplify, standardise and streamline processes. RPA ensures accuracy by performing rote tasks continuously, without any breaks or mistakes. It can replace routine tasks like data entry, but also mundane processes too, for example matching thousands of transactions. This can be incredibly helpful for institutions that have multiple active systems in place that need to work together seamlessly.

However, if information is in the wrong position, RPA doesn’t have the ability to recognise that it should treat erroneous information any differently – this is where ML can be utilised. ML has the intelligence to analyse data, identify where it needs to go and ensure it gets there, removing much of the manual workload and ensuring people can focus on other important tasks.

Developments of the future

Technology is already playing an important role in managing risk and compliance – a role that will no doubt grow in size and importance in the coming years. Manual tasks are becoming automated, freeing up the precious time of employees so that they can prioritise other tasks. Automation is also enabling multiple projects to be managed at a glance, ensuring a comprehensive view of all initiatives. Furthermore, AI-enabled applications are capable of processing and identifying irregularities in huge volumes of data in seconds and with real-time visibility and accuracy. While these capabilities can be hugely beneficial for risk and control, companies cannot afford to become complacent. In the current climate, businesses much ensure the solutions they implement are secure, compliant and agile enough to help them tackle the challenges that lie ahead.