Navigating the compliance minefield with Robotic Process Automation (RPA)
16/03/2020 UiPath
Chris Duddridge, Area Vice President and Managing Director UKI, UiPathAs governments around the globe tighten online regulations, compliance is becoming increasingly challenging for businesses to navigate - and more expensive. Consultancy firm Duff & Phelps predicts that banking regulatory costs will rise from 4% to 10% of banking revenue by 2021. Corporate, legal and compliance departments therefore all have a critical role to play in protecting businesses from unnecessary risk and failure. No matter the industry, companies must take an active role in ensuring they meet legal compliance standards and rules in order to produce their operations, employees, and customers.
However, hiring more people is not the solution to reducing regulatory burden. What's needed to crack compliance management efficiency is the automation of complex workflows. To solve this challenge long-term, compliance leaders must look to technology, including Robotic Process Automation (RPA), which automates rules-based and repetitive tasks, freeing up professionals to concentrate on more strategic, creative, and cognitive work. Businesses should therefore look to adopt an 'automation first' mindset, addressing business challenges with a hybrid human/software workforce.
Fluctuating compliance measures
Using technology to help with an organisation's compliance measures and efforts is becoming more crucial given the rising scrutiny from governments - who are themselves using RPA to maximise and increase their monitoring efforts. As law firm Allen & Overy has noted, due to the higher pressures of regulatory scrutiny today, compliance has moved up the corporate boardroom agenda. For organisations, it's crucial that they're using RPA to ensure that they're meeting the necessary requirements. There are very few places to hide any more, and the financial risks for businesses are high. Between January and April 2019, the UK imposed over £935 million in fines, representing a significant increase in regulatory activity as, up to this year, it had imposed only £334 million fines in total. In addition, for companies falling foul of General Data Protection Regulation (GDPR) rules, the maximum fine is up to 4% of annual global turnover or -‚¬20 million - whichever is greater.
Unfortunately, many companies still don't know if their processes are not meeting compliance standards, or how to remedy non-compliant operations before it's too late. This is where "RegTech" can play a crucial role. RegTech refers to the management of regulatory processes within the financial industry through technology, including regulatory monitoring, reporting, and compliance. A Thomson Reuters survey found that RegTech is shaping regulatory compliance: 52% of respondents claimed that these technological solutions were affecting how they managed this, whilst nearly a fifth (17%) reported they had already implemented one or more RegTech solutions. RegTech solutions integrated with automation technologies such as RPA have been shown to deliver savings of up to 75% for carrying out internal processes for companies in the financial sector.
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