Nikhil Asthana, Nivedh Iyer, and Maria Philips explain how we leveraged our experience in regtech to support a client: optimising the compliance function, streamline the horizon-scanning process, and adding value.

Regulators are moving quickly on financial regulations, following years of uncertainty. This is driving more change for regulated firms than ever, giving rise to the risk of non-compliance, or missing important strategic opportunities.

Firms are struggling to keep up with the growing stream of information – letters, reports, discussion papers, consultations and final policy statements, not to mention outcomes from recent enforcement action taken by regulators – raising the risk of missing key changes.

Regtech, tailored to a firm’s needs and structure, can support the compliance function by reducing the manual work and allowing teams to focus on higher value work.

A multinational insurance company chose us to help their second-line compliance function in streamlining the existing horizon-scanning, regulatory-change process and deliver savings through headcount efficiency. This engagement covered several areas.

Desired outcome and challenges

We identified that the client's original approach was a resource-heavy horizon scanning process that relied on manual data entry, creating the potential for human error. The client was also concerned that the current process was not aligned with industry best practice and regulatory expectations. The firm felt that more accountability for regulatory change should be embedded across it.

The existing process included exchanging emails with regulatory attachments, employees reviewing websites and relying on emails from official bodies. Regulatory changes were also recorded on Excel spreadsheets, which proved to be very resource-intensive and relied on supervision by highly skilled compliance employees.

We worked with our client to identify key outcomes and benefits, as well as the necessary technology and governance frameworks to deliver the objectives. However, this project also presented some challenges.

In some parts of the firm the existing process was deeply embedded and therefore resistance to change was evident. Our team worked closely with the people involved to show that using the technology would produce better results and free up their time considerably, compared to the manual process.

The client selected third-party vendors to supply the technology. We used our project management experience to oversee the implementation, working closely with the solution provider to ensure the technical deliverable was implemented correctly and fulfilled the firm’s needs. Our team provided project management, technical, technological and regulatory expertise at every phase. We adapted to new challenges and focused on finding solutions that added value to the client.

Our approach and solution

Our approach was to deliver the project using four core phases, allowing us to:

1 scope and select the right solution

2 build and refine the solution

3 test and adapt to ensure success

4 incorporate the first three phases to fully embed new processes and controls.

We helped our client conduct due diligence on their choice of software vendors, acting in an advisory capacity to ensure the final selection would meet their needs. Our team worked with the compliance function to establish and analyse the existing regulatory change process – this culminated in the creation of a visual ‘as-is’ model.

We also assisted the compliance team's management to understand their current full-time equivalent (FTE) resource through deep analysis of existing regulatory change tasks. We developed a framework for change, which allowed the relevant teams to discover the benefit of migrating to a tech-supported process. This led to the creation of the ‘to-be’ model with proposed 40% FTE savings demonstrated through automation.

To integrate the technology and complete the implementation of this project, we trained the impacted teams to support the pilot and the final transition​.

Our data, regtech and digital advisory practice was able to:​

  • fully automate the horizon scanning and collating of 34 ‘relevant’ regulatory and non-regulatory bodies
  • embed push-button reporting and access to status of horizon scanning and accountable persons within the firm allowing better alignment with Senior Managers Certification Regime (SMCR)
  • embed end-to-end traceability mapping of regulations to client’s policies with scalability to map to risk controls
  • re-define the process, target-operating model and roles of compliance/firm to leverage the efficiencies achieved via automation of horizon scanning and applicability assessment
  • create an overall saving of 1.5 FTE within the second-line compliance function freeing up compliance consultants for other duties in support of the revised target operating model​.

Next steps

The next steps for the client is leveraging the learnings and improvements from this project. This means fully rolling out the technology to the wider firm.

We'll provide ongoing support for the management of the technology through continued engagement with the third-party vendor.

End-to-end delivery of the technology to ensure a smooth transition will be the priority. This will allow the client to make efficiency gains, add more value to their work, and enjoy the benefits of a tailored technology solution.

How can you use technology to manage and automate regulatory change?

Each project is based on its merits and therefore run on a case-by-case basis – in many instances there may not be a pre-packaged solution that works for every firm. You can start by reviewing your processes and identifying the most resource-heavy practices.

Our six-step regulatory change approach provides comprehensive support on developing and using the right technology to facilitate compliance. We focus on establishing an effective ‘control environment’, which enables the organisation to receive and respond to regulatory change in a timely, sustainable, end-customer friendly, and cost-effective manner.

Building a solution can be difficult and requires introducing the right frameworks alongside the technology. Firms need a range of expertise; people who understand the challenges that firms face, data and technical requirements, and experts that can interpret the information and deliver a robust technological solution.

We can support firms seeking to use automation in regulatory change to support a broader organisational shift. Our knowledge and expertise help to build a tailored solution that meets your needs and pushes your firm closer to strategic and commercial goals.

Building a tailored technology framework to help reach your goals

To learn more about our technology-led approach to managing regulatory change, get in touch.

Sign up to get the latest financial services updates by email