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Regulatory Compliance vs. Digital Innovation: A challenge or a perfect match?

Having worked with Digital Innovation for the past decade, I have often encountered the challenge of integrating regulatory compliance requirements with new digital initiatives, products and services. The million-dollar question is how can you build a seamless solution with the best customer experience that meets regulatory requirements? And how do you remain competitive and deliver new services with shorter time to market without comprising compliance requirements?

So what is the real problem when addressing regulatory compliance?

In our ever-changing world with increasing complex legislations and regulations, disruptive business models, new technologies introducing market faster than ever, and consumers asking for better transparency, the regulatory compliance is on top of every CxO agenda. 
A survey made by financial news shows that organizations typically spend 4% of their total revenue on compliance, but that could rise to 10% by 2022, and more than double the cost
of compliance over the next four years.

With EU General Data Protection Regulation (EU GDPR) enforcement in May most of the organizations have been working intensively to “become” compliant and has realized it is not going to be one man job. The effort to stay compliant will require both organizational and technology skills to support the ongoing effort.

That leads to two main challenges when addressing regulatory compliance: Legacy systems, and complex information handling. In the latest NNIT Expectation Barometer 51% of the respondents answered that they think that legacy is a challenge when thinking Digital Innovation initiatives. That puts the Head of Compliance and Chief Compliance Officers under pressure, which looks for innovative and intuitive solutions, both for regulatory monitoring but also the staff servicing the customers.

How could the solution look like?

Only 30% of all companies are using existing technology to help manage risk and compliance (report from Deloitte). That creates an opportunity and great potential to re-think and re-design the regulatory compliance in organizations with either existing or new technology.

Regulatory compliance has traditionally been seen as a heavy paper-based and resource intensive discipline. However, with the emerging technologies, the organizations can leverage from the opportunities. As always it is important to stress that no technology suits ’one size fits all‘ strategy but with variety and by combining solutions would fulfill your organization's regulatory compliance demands. The emerging technologies such as Robot Process Automation (RPA), Advanced Analytics & Artificial Intelligence, and Blockchain solutions are effective to secure compliance based on the fact that we are seeing more regulatory compliance related use cases built on the technologies.

The rise of RegTech

Whereas there should be no doubt of FinTech cementing its importance for the Finance and Banking industry, the spin-off and newer term RegTech (Regulatory Technologies) is still yet to make a commercial breakthrough. While the name is new, the blend of regulation and technology to address regulatory challenges has existed for some time with varying degrees of success. However, addressing the increasing levels of regulation with a greater focus on data and reporting has brought the RegTech offering into focus thereby creating more value for the organizations that invest in these solutions. RegTech can utilize some of the previously mentioned technologies as machine learning and artificial intelligence to establish enterprise-wide data governance and reporting, but also Natural Language Generation (NLG) technologies are paving the way with intelligent chatbots. 

The pitfalls

No technology is bulletproof and will not make your organization fully compliant, but it can give both technological and competitive edge, if implemented correctly and with human interaction in mind. Furthermore, you should consider following when implementing new RegTech:

  • A well-defined governance model with clear ownership for handling regulatory compliance and thinking it into business processes from start is essential to secure technological and organizational capabilities

  • Remember a governance model alone cannot do it. You will need a combination of rules, processes, values, and to involve people. This will not only add great value, but will help shaping the infrastructure and services to support your digital regulatory compliance journey

  • Integrating compliance into the innovation culture is vital to make maximum use of the emerging technologies and thereby deliver great customer experience 

Thank you for taking the time to read this article. Would you like to learn more on NNIT’s regulatory compliance solutions or share any thoughts about this topic? Please feel free to contact me.

About the author

Mobeen Arif has more than 10 years of experience in digital transformation. He has worked with IT and business transformation across many industries such as finance, public sector, and life science. He advises clients on value creation through digital transformation.

NNIT as your digital regulatory compliance partner

NNIT has a strong track record in regulatory compliance. With many years of hands-on experience serving our customers in various sectors as pharma, finance, energy, public and healthcare as trusted advisor and digital implementation partner, NNIT masters all the above in the field of Digital Innovation.

Whether your organization is thinking of implementing new technology or utilizing existing, NNIT can support your organization’s digital regulatory compliance journey.



Mobeen ArifZMAR@nnit.comManaging ConsultantMobeen Arif



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