In today’s banking world, the compliance function faces an overwhelming workload. From overseeing all business processes and procedures, ensuring the company’s adherence to regulatory and ethical standards and internal policies, and managing data flows by researching, recording, and analyzing information. Compliance teams have high expectations to meet.
In a financial institution, the compliance function is vital to the second line of defense for managing risks. It is responsible for monitoring and mitigating risks associated with trading limits and breaches, market manipulation, misconduct, money laundering, and other examples of violations.
And despite their role’s importance, compliance teams waste up to 70% of their time rekeying information between applications. Many of them are in desperate need of more streamlined workflows to do their jobs accurately and efficiently.
In this article, we explore how workflow automation can address some of the issues compliance struggles with and increase their process efficiency.
The Challenges of the Compliance Function
At its core, compliance is a lengthy, tedious, and resource-intensive system of processes and policies. In the banking world, these teams must navigate through a copious amount of data and documentation and follow complicated and inefficient processes. A recent survey by Corporate Compliance Insights found that 53% of 240 compliance officers don’t have the required resources to perform their jobs to their full potential. 59% of the respondents said they feel burned out, and 40% lack organizational support.
These findings reveal that compliance teams struggle to do their job due to resource limitations and feel overworked and under-supported within the organization despite their vital role in the business. Respondents have also shared that they are often unfairly held responsible for failures when something goes wrong, which in many instances is due to the lack of apt resources and assistance in the first place.
For example, let’s look at the Know Your Customer (KYC) and Anti Money Laundering (AML) operations. These teams are often unsure who makes the final decisions on priorities and risk acceptance. More importantly, they struggle with disconnected systems and lack automated due diligence and verification methods. The time they are expected to spend on analytical thinking and risk assessment is spent on repetitive processes and data gathering. They also must exchange critical documents and information over emails. These significant concerns can negatively affect efficiency, data quality, and client experiences.
This chaotic environment leaves skilled professionals under-utilized, as they must focus on carrying out monotonous and repetitive tasks prone to errors. And this comes at a price for the business too. For example, Fenergo surveyed 1,055 Corporate Bank executives in 2022 and found that 72% of them estimated the cost of KYC to be a shocking $1000 – $3000 per client.
The Need for Workflow Automation
Workflow automation can bring myriad operational benefits to compliance teams, positively impacting the entire organization. Regardless of the level of complexity of each process, workflow automation can eliminate operational inefficiencies, allowing teams to focus on making better-informed decisions and delivering more value to the business.
If they want to support their compliance function and the critical work it does, firms need to take steps to automate business processes. The goal must be to create seamless workflow experiences for their risk and compliance teams, enabling them to receive the data they need from the applications they work with at the point they need it.
An example of a technology solution that can streamline compliance workflows is the Glue42 desktop integration platform. It is a business solution that allows two or more desktop applications to connect with each other, simplifying the workflows between them and resulting in better, faster, and more precise interaction. With Glue42, firms can integrate all internal and external apps into powerful workflows, providing single-click synchronization between all desktop applications and eliminating swivel-chairing. As a result, compliance teams can stop wasting valuable time doing manual copy/pasting and rekeying and focus on critical tasks like tracking and monitoring limits and transactions, identifying potential risks, and complying with regulations.
The future of compliance can hold much promise if leaders work on solving the challenges it is facing. The culture must be transformed into one where adaptive problem-solving and cross-functional collaboration are highly encouraged. This shift needs to include solid strategies for augmenting technology and streamlining business processes.
