As a Chief Compliance Officer or compliance professional, what does your day-to-day entail? For those who haven’t invested in some kind of financial regulatory compliance software (better known in the industry as Regtech) it probably looks something like this:
- Sending reminder emails to those employees who haven’t submitted their preclearance requests or other necessary documents
- Jumping into Excel to keep track of countless streams of data
- Tracking down any and all critical information on employee trades
After all the back and forth between email and Excel, you wind up having completed maybe half of the tasks on your to-do list. And that’s on a good day.
The solve? Regulatory technology (Regtech).
What is Regtech?
But let’s take a step back. While you might use terms like compliance automation solution or financial regulatory compliance software, Regtech is the official industry terminology.
To put it simply, Regtech is a technology solution designed to automate regulatory compliance processes.
Seems great, right?
And whether you’re looking to decrease the number of reminder emails you’re sending out to employees, or you want to focus on bigger picture compliance goals and strategies, often Regtech is the way to do it.
Generally, firms investing in a Regtech solution are looking to:
- Streamline manual processes
- Remove the more time-consuming, Excel-based work
- Create an enhanced compliance program for the entire firm
When Regtech Goes Wrong – The Cost of an Outdated Financial Regulatory Compliance Software Solution
But what happens when your shiny, brand new Regtech solution works against your goals?
Investing in a new financial regulatory compliance software is a commitment of time, money, and resources – all of which ultimately aids in the automation of processes and the reallocation of resources to bigger-scale projects.
However, when your Regtech provider is outdated or under-resourced, that investment might end up costing you even more.
“In 2018, poor-quality software cost organizations $2.8 trillion in the U.S. alone, according to the Consortium for IT Software Quality (CISQ).” – Forbes
Because while the right investment will 100% be worth the money and effort, the wrong one can result in numerous (costly) damages:
1.Money and Resources
You’ve sunk however much money into this new technology only to have it turn out to be a waste of efforts. Now not only are you out that investment, but you must spend even MORE money on a different solution. Or wind up right back where you started, in Excel.
Time might just be a company’s most valuable asset, and with an outdated technology, your time is wasted trying to work around a solution that was meant to streamline efforts.
3. Trust and Credibility
According to some clients, one of the best aspects of a well-functioning Regtech solution is the credibility it lends to a compliance program. But when the rest of your team has to deal with clunky, outdated technology, you probably won’t be earning much credibility around the firm.
Likely, you’ve chosen to invest in a Regtech solution to give yourself and your team the freedom to focus on bigger scale goals and projects. But with an outdated, under-resourced technology vendor requiring most of your attention, those projects just took a back seat…yet again.
If you’re relying on an outdated, ineffective technology, chances are, your program is going to suffer – possibly to the extent of risking damages, fines, and reputational ramifications.
As a compliance professional, you’re likely making dozens of critical choices every day. And while it might seem easy to go with the first or most obvious Regtech solution available, that choice can end up costing your team and your firm.
After all, technology was designed to make our lives easier. But when it becomes yet another burden on your compliance program, you have to ask yourself: was it worth it?
Critically comparing alternatives and finding the best financial regulatory compliance software for your team, while time-consuming up front, will be well worth the effort when you don’t wind up with the technology version of a lemon.