There has been a lot of talks recently about what a gamechanger compliance management technology is for organizations in the financial sector. It is important to remember that before this decade, most mid-sized and small financial organizations were relying on manual labor to manage compliance. The last decade has seen a paradigm shift in compliance and more businesses are now using technology to deliver compliance performance than ever before.
ompliance platforms can easily track the performance of the organization when it comes to compliance. Businesses can go beyond the number of compliance violations that occurred and look at meaningful metrics like how fast they were at detecting the compliance violation, how much it time to resolve the issue, how many people needed to get involved to close the issue, and much more.
What is it that compliance technology can do that is so beneficial for businesses in the financial sector? That is the very question we are here to answer. Here are some of the features which make these solutions such a useful tool for compliance experts:
Audit Trails
Whenever there is a compliance-related issue, the compliance expert in the organization has to make sure they get to the root of the issue. Compliance is not just about catching compliance violations; the main objective of the compliance department is to have a compliance framework so robust that there are no violations. This means that whenever there is a compliance violation, the compliance experts need to understand how to prevent it from happening ever again. They use internal controls – processes and assessments – that help eliminate the problem.
Finding out where the problem occurred can be difficult because the compliance expert does not know what action was taken by which employee. They need to work like a detective to understand where the problem originated and how it managed to stay in the system undetected.
Contrast this with a similar situation happening in an organization that uses a compliance platform. There is no need to investigate anything; every action that is taken is recorded by the compliance platform. Instead of having to play detective and ask around, the compliance expert simply needs to look at the changelog to understand what went wrong. These audit trails help not just in audits but in compliance management, risk management, and many other similar domains where it is important to know exactly what went wrong.
Read also: Risk management blog
Automated Reporting
Another major problem faced by businesses that manage compliance manually is the lack of visibility and transparency into compliance performance. There is no way for management to understand how the compliance department is performing without looking at periodic reports created by the compliance department. This means there is a major delay in events occurring and management being aware of it. A compliance violation may stay for some time in the system until it is caught by the people monitoring the compliance framework. Then it will be reported to the compliance team, which will then report it to management.
Compliance technology ends this dependency. All the data is being collected in real-time and can be shown in real-time as well. Instead of having to rely on outdated reports, management can see the current state of the compliance framework. They have executive dashboards that show important compliance metrics. They can see how many compliance issues exist, which issues are being worked on, how many issues have been detected, the time it is taking to resolve an issue, and much more.
Performance Metrics
Not only is there a lack of transparency about compliance, but there is also a lack of visibility into compliance performance as well. Many businesses resort to simply tracking the number of compliance violations that occurred. The problem is that while knowing the number of compliance violations does tell something about the performance of the compliance team, it sheds no light on the overall performance of the compliance team. It is impossible to know what is being done really well by the team and what requires improvement. There is no need to investigate anything; every action that is taken is recorded by the compliance platform. Instead of having to play detective and ask around, the compliance expert simply needs to look at the changelog to understand what went wrong.
Compliance platforms can easily track the performance of the organization when it comes to compliance. Businesses can go beyond the number of compliance violations that occurred and look at meaningful metrics like how fast they were at detecting the compliance violation, how much it time to resolve the issue, how many people needed to get involved to close the issue, and much more. This allows management to understand its own shortcoming better and create a compliance management framework that is more responsive.
Progression Tracking With Compliance Management Solutions
Compliance management solutions do not just help measure the performance of the compliance team – they also help in ensuring that all work gets done within the prescribed deadlines and metrics. Each compliance action can have its own task within the platform where all the information about the task is uploaded. Management can do a deep dive into the tasks to see how each one is progressing. This means that instead of having to ask for updates or micromanage the teams in any way (because both lower morale and increase stress among the employees), management can simply view progression statistics whenever needed.
Its features make compliance so much easier with compliance technology. Financial organizations understand how important is to ensure compliance, thus any tool which allows them to improve compliance performance in a sustainable way will be welcomed.
