As banks look to establish new patterns of normalcy post-Covid, they face strong headwinds. Given the continued steep pace of regulatory change, evolving customer behaviors, rising fintech competition, and shifting regulatory priorities, they are under increasing pressure to adapt a new paradigm, one that combines the agility of newer technologies such as artificial intelligence (AI) along with the powers of human expertise. That’s according to Wolters Kluwer Compliance Solutions, writing in a new thought leadership piece.
In the article, “Artificial Intelligence and the Pursuit of Compliance Program Optimization,” Elaine Duffus, Wolters Kluwer Senior Specialized Consultant, explores the value of leveraging AI technology to optimize banks’ regulatory compliance management efforts, in combination with the benefits that human experts can bring in validating those processes.
“Consider the way in which automated solutions apply AI to the regulatory change management processes. While the use of AI these days is almost a given, be sure to ask what is done with the machine-derived results,” writes Duffus in ABA Banking Journal. “Best practice would be to consider a solution that includes a human-expert validation step. There are far too many nuances in regulatory compliance change events to leave it entirely to the machines.”
To support her argument, Duffus references the findings of Wolters Kluwer’s latest Regulatory & Risk Management Indicator banking survey—where nearly half of all respondents cited “manual compliance processes” as a “7” or higher concern on a 10-point scale as among their top obstacles—in promoting the human-expert-plus-leading-technologies approach to most effectively manage today’s banking challenges.
“Even when your regulatory change management process is automated, if the content coming into that automated process is not properly configured, your expert compliance resources may take just as much time as a manual process to wade through all the irrelevant content,” Duffus warns. “Keep that consideration in mind when venturing down the road to automation. Ensure that the automated solutions under consideration provide the means to help control the fire hose of regulatory changes.”
“This latest Compliance Solutions article offers sound, practical guidance for regulatory compliance professionals who are working to optimize their resources—and the effectiveness of their programs during times of tremendous disruption and change,” said Steven Meirink, Executive Vice President and General Manager, Compliance Solutions. “The good news here is that the incorporation of appropriate automation into one’s existing compliance processes can have considerably positive impacts in simplifying and enhancing your regulatory compliance management program.”
Wolters Kluwer Compliance Solutions is a market leader and trusted provider of risk management and regulatory compliance solutions and services to U.S. banks and credit unions, insurers and securities firms. The business, which sits within Wolters Kluwer’s Governance, Risk & Compliance division, helps these financial institutions efficiently manage risk and regulatory compliance obligations, and gain the insights needed to focus on better serving their customers and growing their business.
Wolters Kluwer’s GRC division provides an array of expert solutions to help financial institutions manage regulatory and risk obligations. Wolters Kluwer Compliance Solutions’ eOriginal® suite of purpose-built, digital lending solutions, for example, helps lenders digitize their transactions and features electronic signatures, collateral authentication and an electronic vault. Wolters Kluwer Lien Solutions’ iLien Motor Vehicle provides for the processing and management of motor vehicle titles and liens, helping solve the most unique and complicated challenges in title perfection. Wolters Kluwer Finance, Risk & Regulatory Reporting (FRR), meanwhile, is a global market leader in the provision of integrated regulatory compliance and reporting solutions.
About Wolters Kluwer Governance, Risk & Compliance
Governance, Risk & Compliance is a division of Wolters Kluwer, which provides legal and banking professionals with solutions to help ensure compliance with ever-changing regulatory and legal obligations, manage risk, increase efficiency, and produce better business outcomes. GRC offers a portfolio of technology-enabled expert services and solutions focused on legal entity compliance, legal operations management, banking product compliance, and banking regulatory compliance.
Wolters Kluwer (AEX: WKL) is a global leader in information services and solutions for professionals in the health, tax and accounting, risk and compliance, finance and legal sectors. Wolters Kluwer reported 2020 annual revenues of €4.6 billion. The company, headquartered in Alphen aan den Rijn, the Netherlands, serves customers in over 180 countries, maintains operations in over 40 countries and employs approximately 19,000 people worldwide.