The Modern Banking Workplace: Simplifying and taming unwieldy compliance processes
As banks strive to ensure compliant and competitive business, many are thinking about how collaboration can help them efficiently manage compliance-related workloads and deadlines. “Ensuring compliance with multiple, exhaustive regulations involves large volumes of information, and as the regulatory landscape continues to evolve it’s important to have a clear picture of how the bank aligns with the latest requirements,” says Peter Hazou, director, worldwide financial services industry at Microsoft. “Banks need efficient feedback loops in place to enable two-way discussion and responses to inquiries with regulators, developers and partners. Managers at every level need to understand how regulatory requirements might affect their decisions, from the design and marketing of products and services to high level corporate policy. Everyone involved in developing bank products will need to understand cross-border regulatory implications. Empowering bank staff by giving them the right technology tools to respond to regulations is critical to efficient business.”
Many banks use insight technologies to provide a 360-degree view of the customer, and now those technologies are transforming their engagement with regulators. “A 360-degree view of the entire regulatory relationship is the foundation for the oversight, process and communication needed for a successful regulatory relations programme,” says Brad Koontz, vice president, industry solutions at Hitachi Solutions, whose Regulatory Relations solution is built on Microsoft Dynamics and integrates with Microsoft 365 Enterprise. “Banks must report all regulated activity for multiple roles and surface the relevant information to the right person at the right time. They need to manage multiple interactions such as examinations, self-reported issues and media communications, while minimising the repetition of work when the same information is requested for different reviews. It simply isn’t practical to manage all this by email and spreadsheet. A stakeholder management system tuned for regulatory relations is crucial.”
Sophisticated mobile apps enable bankers to surface relevant insights from powerful analytics and machine learning, backed by the scalability of the cloud. “It’s important that bankers can use the tools they believe will immediately make their work lives better and easier,” says Koontz. “Our challenge was to create a solution that allowed for all material information to be delivered to executives in a curated and timely fashion, so we included a mobile app that helps them prepare for meetings. Users can compile and store meeting minutes, tag activities based on importance and surface the relevant material from personal and shared documents across various repositories.”
These capabilities are transforming the way bankers work with regulators by creating a shared environment in which everyone works with the latest data. “Something as simple as a secure, shared space where all parties can work with the latest version of a document and keep everyone informed, make sure all those who need to give input can do so in the same space, and enable insightful conversations between departments, teams and geographies,” says Hazou. “They can discover and capitalise on existing work that was prepared in response to previous interactions with regulators. There is also tremendous potential for social workspace applications such as Yammer to enable a community approach to understanding regulatory issues and how to manage them.”
Crucially, these systems enable banks to leave behind paper-based processes, emails and disperse spreadsheets which are hard to share, impossible to search, vulnerable to attacks, and open to mistakes that mean non-conformance with regulations and policy. “The system allows users to track an email – such as an update from a regulator – so a record is created and it is made visible to everybody who has access to the system and the proper credentials,” says Koontz. “That removes the chance of error in handling the email, meaning one less place where an act of non-conformance can occur.”
By using these technologies to transform the way they manage their regulatory commitments, bankers have the potential to improve their relationship with the regulators – helping to boost customer-centric innovation. “Collaboration with regulators is an essential piece of the puzzle for banking organizations,” says Hazou. “It enables greater accuracy, efficiency, and timeliness in meeting regulatory obligations as well as greater insight into the products and services that will create value for customers and the business. A banker who can present a clear vision of how the bank is managing its compliance obligations and spin up visual representations to answer specific questions, can make each engagement more productive and valuable. They’ll be able to get new products to market faster, in a manner consistent with regulatory requirements, thus diminishing the risk of regulatory fines and penalties for non-compliance, and consequently, higher margins. As a result, we’re likely to see more relevant products and services reaching the market in a timely manner.”
Privacy regulations – such as the General Data Protection Regulation (GDPR), with a deadline of May 2018 – are also a growing concern. Despite the complexity and multiple instances of banking and customer records, banks need to ensure consistent, cohesive and transparent responses to regulators. A modern workplace, integrated with regulatory management solutions, simplifies these processes. “The Microsoft 365 Enterprise platform helps banks get up to speed with GDPR, which mandates banks operating in Europe or with European clients to have comprehensive controls and transparent policies for personal privacy,” says Guillermo Kopp, director, worldwide financial services industry at Microsoft. “Features such as Advanced Data Governance and Advanced Threat Protection will help banks demonstrate to regulators that they safeguard customer information and privacy most effectively. Such streamlining of compliance activities and information will empower bank employees to conduct more insightful analysis, to the benefit of both the compliance process and bank business.”
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