The resilience aspect in "RegTech"
It is encouraging to see that most of the regulations regarding data protection and the security of essential services induce organizations to adopt two unmistakable governance principles: transparency and resilience.
Of course, misbehavior and breaches lead to fines and punishing "ex post" behavior but in general, regulation nowadays rewards "upfront" preparation. The reward lays in the fact that regulation and compliance are in fact a business driver, both bringing corporates to "better levels", minimizing costs, increasing profit, and yielding better and more secure services to all of us.
When it comes to the "how to", a game-change is at stake. The corporate world is evolving to the consensus that transparency, resilience, compliance, and the creation of conditions allowing long term assurance are difficult tasks to perform without the use of technology.
In the financial world, this is not even questioned anymore. The aspect of "FinTech" allowing all kinds of compliance and business driving outcomes is already embedded. FinTech is a broad concept of "Financial Technology" making outcomes possible like "know you customer"- facilitating better decision making, better fraud management, improved risk management, etc.
As a logical extension, technology, besides being a key aspect of sustained innovation, is also becoming a means to achieve compliance. This is "RegTech" or "Regulation Technology" …technology and integrated software that automates, simplifies and embeds compliance, risk and crisis management into company governance processes.
What does "RegTech" do?
RegTech directly contributes to better efficiency meaning eliminating manual processes, providing more accurate management of risks, automated regulatory reporting, and audit opportunities, and many more. RegTech is so much more than a fashionable statement or wave to surf on … it becomes part of business itself. Eventually, it becomes part of governance, and the way authorities control and follow-up on compliance.
The use of RegTech helps to focus with increasing efficiency on risk governance, resilience, and reporting. With increasingly numerous and more complex cyber-attacks, it is now clear that coping with these risks is about a lot more than "just" strengthening ICT and security. It is a matter of (also) addressing critical assets, business continuity and awareness across organizations.
When it comes to accountability proofing, the RegTech business case is undeniable. Organizations must deal with uncertainty; thus, this becomes a business-critical management domain. The days of unstructured data-based risk management are numbered. Manual approaches (in spreadsheets and documents) simply will no longer be sufficient. Organizations need to map regulations to the level of appropriate functional internal controls in a STRUCTURED way. RegTech makes this possible. Worth mentioning are benefits like quick analysis, what-if simulations, follow-up, reporting, crisis-management, and communication …
Evidencing an accountability framework and proofing must be possible on the spot, correct and complete. Times of hopping on and off from one (external) control to the next, working-towards and over-relying on good audit reports, keeping the lights on, or doing just enough to avoid penalties are over. With RegTech, corporates don't play "regulatory response roulette" anymore.
RegTech: a strong strategic statement.
Sending its risk-managers into loads of spreadsheet-based analytics, producing massive paper flows that go straight to the printer is no longer the right approach to modern risk management. Using RegTech induces professionalism leading to excellence and it creates a risk culture to be proud of.
The future is…. now!
Artificial intelligence, machine learning, distributed ledger technologies (blockchain based) and even quantumcomputing have already made their entrance. Markets and consumers will ask and need these technologies to get the right services. The regulatory aspect will evolve along…and therefore Compliance and RegTech will not be a "nice-to-have" anymore, but a "need to have" or "want to have".
How can RealCGR contribute to compliance?
We help in the objective to enhance resilience, transparency as well as consistency and to standardize and embed governance, risk, and regulatory processes. We help our clients to reach higher levels of readiness and quality at a lower cost.
For us, RegTech is certainly about this. We do this with our products which contain integrated RegTech tools and related services. These support legal compliance to EU and UK Security of Networks & Information Systems (NIS), EU and UK GDPR directly.