Other parts of this series:
“…for the compliance function in financial services, cost cutting and multi-dimensional change may go hand in hand.”
Cost reduction targets generally are not motivation to grow a function. But for the compliance function in financial services, cost cutting and multi-dimensional change may go hand in hand.
Today’s compliance operating model should be future ready, while still retaining its efficiency. Responding to Accenture’s 2019 Compliance Risk Study, 87 percent of compliance executives expect investment in their function to increase over the next two years to boost future readiness. But 71 percent also face quantitative cost reduction targets, with almost three in four expecting cuts of more than 10 percent in the next three years.
What’s the solution to this apparently contradictory challenge?
Bold thinking is a starting place. The compliance function’s traditional technologies and processes likely won’t be able to keep pace in the Information Age. Compliance professionals experimentally dabbling in new technologies likely cannot get the function where it should be. What’s required is larger scale transformation, incorporating flexible new technologies such as artificial intelligence (AI), robotic processing and regulatory technology (regtech).
Compliance leaders should set aside proof of concept exercises that show limited gains in favor of industrialized deployment of new technologies. A microservices approach—favoring small and self-contained processes in place of one comprehensive architecture—can be more nimble. More specifically, microservices that inter-operate with foundational governance, risk and compliance (GRC) workflow offer a more responsive solution that can rapidly adapt to new business needs.
Full-scale transformation involves uncertainty, but there are ways to ease the transition. Respondents to our Compliance Risk Study say they are sharing resources and collaborating with other institutions, to share insights, validate strategies and drive down the cost of ownership.
More good news: Many compliance leaders have already taken steps toward a technology-led approach, trying out new solutions. The question is, can they dive all the way in? We urge compliance leaders to execute new technology strategies with speed, readying their functions for better efficiency and cost savings. By acting boldly, they can future-proof their financial services compliance function.