By FINTECH Books Contributor, Ramitha Liddington
Ten years ago, if the words ‘millennials, blockchain, Instagram’ were used, you would be forgiven for thinking it was a foreign language. The world is changing – and it’s changing fast. Outdated compliance procedures that were implemented 20 years ago are not fit for purpose in an environment that’s moving towards FinTech, RegTech and increasing Digitisation.
The trick is to drag compliance into the 21st century without compromising on regulatory requirements by leveraging regulatory focused data and organizing information so that people understand it.The human factor of managing risks cannot be ignored. Technology alone is not the panacea. Chief Compliance Officers will set the overall policies of how data will be managed. It’s not just about implementing new software and relying on algorithms to mitigate corporate risk, but it represents a change in state of mind. There is a paradigm shift towards transparency.
Embracing and adopting models that suit business needs to employ technology that encompass a myriad of new regulations and guidelines would be a step forward.Even the most ‘oak-desked’ lawyer would benefit from stepping away from paper based KYC documents and acknowledge that the gap between software and non-software enabled services has widened. Smart phones have become an extension of existence and it would be remiss not to utilise the technology that is already available to manage risks using agility, speed and integration.
Apart from environmental concerns of paper and waste that traditional compliance roles demand, there is the obvious cost factor. At the recent G20 summit in Germany, Australian Federal Treasurer, Scott Morrison announced that global financial institutions spend more than US$70 billion on compliance annually, with costs expected to approach US$120 billion by 2020. Using the right processes, controls and technology should move the ancient load of compliance procedures into a more usable and effective dimension.