Company blog

Digital Transformation: What does it mean for Compliance?

Feb 19, 2019

Digital transformation is the term du jour that is almost inescapable across all business sizes and industries; defined by Gartner as, “the process of exploiting digital technologies and supporting capabilities to create a robust new digital business model”. Everyone is looking for a way to “transform” their business into a better version of itself to gain a competitive edge.

The financial services industry overall has experienced digital transformation for over a decade with an emphasis on digitizing and optimizing experiences for customer facing activities. A PWC study completed in 2018 stated that retail banks alone spent $20 billion dollars to optimize digital transformation in their business. While creating improved customer experiences is great, it is only in recent years that the industry has pivoted digital transformation investments to operations. Such investment is critical to improving an institution’s overall operating model. For example, when asked about digital transformation at JP Morgan, CIO Dana Deasy has been quoted as saying, “[we’re] freeing people to work on higher-value things…it’s such a terrific opportunity for the firm”.

Looking at the positive impact digital transformation has had in other areas of the business, it’s time to apply it to compliance.

Digital transformation can benefit 4 key areas:

  1. Eliminating time consuming manual processes: The majority of Compliance’s time is often spent buried in manual processes that leave little room to improve efficiency, let alone think about how to participate in any business transformation activities. When Compliance leverages RegTech solutions that help to digitize common manual processes such as certifications, it enables a business to shift focus from manual tasks. This enables Compliance to get back their time and now have the ability to think about value-added work.
  2. Gaining insight through smarter use of data: Every business, team, and industry wants to be smarter in how they use data for actionable insight – and Compliance should be no different. However, the challenge for Compliance is that often data exists in many places and there is a lack of resources to interpret data trends into action. By aggregating data through digital transformation, Compliance teams can start to use their existing resources to better monitor, review, and reconcile data for more meaningful analysis.
  3. Keeping current with regulations, business changes, or innovations: One of the major benefits of investing into a digitally transformed compliance program is the ability to easily and quickly make changes as needed by the business or regulators. According to Deloitte, if Compliance teams cannot keep pace with the speed of overall business they risk obsolesce or closing themselves off to the rest of the business.
  4. Creating and showing value: In order to keep open communication lines with other areas of the business that are transforming, Compliance teams need to leverage technology to create value. What this means is for Compliance teams to use technology as way to lend a voice to important revenue-driving business decisions. By identifying risk faster, creating data driven recommendations, reducing costs, and partnering with other areas of the business, Compliance is finally able to get a seat at the digital transformation table.

The bottom line? Digital transformation is essential to compliance’s evolution and developing risk programs that meet future technology requirements/needs.

WEBINAR: Compliance Management & Digital Transformation | Feb 28 @ 2 PM ET
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