Top Ten Tips for Banking Compliance Success

 Sunil Prabhu, Industry Consultant, Banking & Insurance at Lexmark

Following the financial meltdown, regulators have been responding with a steady stream of new regulations, zealous enforcement and punitive fines.

Sunil Prabhu, Industry Consultant, Banking & Insurance At Lexmark

To name a few: Basel III, EMIR, MIFID 2, FATCA, AML, CFT, SEPA; and banks and capital markets can expect more.

A bank official recently testifying before Congress in the US, estimated that conforming to banking-industry regulations now costs the industry approximately €37 billion a year globally.

Some of the large banks see compliance as a complex, bottomless pit. Given such a wide array of legal and regulatory requirements, banking CIOs we talk to are keen to automate manual processes, which are prevalent in the sector. One area in urgent need of automation is Big Data. If banks can find a way to manage the large volumes of unstructured data (85 per cent of all data within a bank is unstructured according to some estimates) and paper documents, siloed data stores, disjointed processes and paper-based workflows this would be a big step in the right direction.

Some leading solutions advocate modernisation through replacement of core applications. These are long – and often disruptive – programs, not always economical or feasible and fraught with risk, delays and cost overruns.

Things to look for

The ideal solution is the one that can safeguard their investment, existing applications and technologies. Here are some tips that banks are applying in the pursuit of the Compliance Holy Grail:

• Sophisticated tools that extract data from paper documents to reduce costs and make processes faster, efficient and reduce errors
• Multi-channel capture at the point of service that enables bank employees to capture information coming in from a range of devices and applications
• Ability to input captured content directly into back-office systems (CRM, core-banking applications) with minimum manual intervention – reducing the need to offshore data-entry
• Automated processes and integrated tools for capturing, distributing, auditing and reporting information
• Introduce embedded checklists in workflow solutions to ensure integrity of documentary obligations to prevent incomplete applications from being processed
• Ability to search enterprise wide, siloed data-stores (bank account, loan account, mortgage, insurance, cards) to build a 360 view of customer
• Access controls in output infrastructure (the Achilles heel in banks infrastructure) to prevent unauthorised access to secure data
• Time-stamping and version controls to keep a trail of who accessed what data and when
• Monitor exchange of information of sensitive nature by email (insider trading, rate rigging, inappropriate content, harassment & bullying)
• Data validation utilities that compare document data with the bank’s existing information sources to ensure accuracy

A trusted partner

Resolving the data-issues that is such a key part of compliance requires subject matter expertise and a deep understanding of processes and challenges. System’s that can meet all these requirements, will offer limited benefits if the vendor implementing them lacks the track record of trust, delivery and credibility. It is crucial they are capable of providing an integrated technology stack and all the components required to build a bespoke solution instead of a one-size-fit-all approach.

Conclusion

As the global economy stabilises, compliance is only going to continue and the fishbowl-effect is not going away anytime soon.

Using specialist solutions, banks can extend the life of their current legacy systems and still enjoy cost savings through lean processes and operational efficiencies. Data security, data integrity and consistency, reduced manual intervention, single click access of information and auditability are all building blocks for a future-proof regulatory compliance strategy.