February 10, 2023
Estimated reading time: 4 minutes
What is horizon scanning in the compliance and regulatory world?
For established financial institutions and newly-regulated companies alike, keeping up with compliance changes and emerging issues can be overwhelming.
Without all the information in one place, it’s up to your compliance officer to trawl through hundreds of different sources on a regular basis and determine which announcements are relevant for the business. Wasting literally hundreds of hours on repetitive, manual tasks and using up valuable focus resources that could be better spent.
If only there was a way to automate this research and get access to only the relevant insights and regulations that concern your specific company. That’s where horizon-scanning technology and intelligent regulatory insight come in.
What’s horizon scanning technology?
Horizon scanning technology refers to a combination of AI and machine learning algorithms. The goal of this technology is to benefit from foresight, spotting new regulatory announcements and updates as soon as they are released. This allows regulated entities, such as health technology companies and financial services organizations to plan their compliance strategy.
Horizon scanning technology is a helpful tool for businesses in regulated industries, like financial institutions. Since 2008, the fintech world has seen more than 50,000 new regulations, which can be incredibly difficult to manage.
But reacting quickly can mean the difference between getting ahead of your competitors instead of losing business. So it’s incredibly important to have this type of reactive technology for emerging trends.
Moreover, utilizing new technology like AI horizon scanning means you get access to a coherent view of regulations and signals for potential threats across multiple regulatory bodies. This means it’s easier to identify potential risks and the relevant actions to take.
How does horizon scanning technology work?
Horizon scanning technology works by employing artificial intelligence to find and track regulatory changes.
First, the platform uses emerging technologies to actively search and passively ‘listen’ for updates and announcements that are industry-relevant. Usually, the algorithms build in an approved database of authoritative sources, such as the regulatory bodies themselves.
Next, horizon scanning technology connects the announcements to your existing operations, including any controls, obligations and policies. This way, you’ll get instant access to any gaps or technology risks that would prevent your business from compliance.
Finally, it’s the job of a compliance officer or team to determine the impact of new regulations across the organization, and use innovation to determine the method and strategy going forward to meet new requirements and future trends.
A brief history of horizon scanning in regulatory compliance
In the early 2000s, whispers of horizon-scanning technology were mentioned across regulated entities, but the actual technology was not yet created. It was largely a buzzword.
After the 2008 global economic crisis, then Prime Minister Gordon Brown set up a horizon-scanning unit. It was recognized across the government that leaders needed more than a short-term plan in reaction to crises in future scenarios. Moreover, it would be incredibly useful to pre-empt the effects of future threats and draw up the right policies for risk management.
Since, private horizon scanning technologies have been built across regulated industries, including HR, the legal sector and of course financial services.
Real-life applications of horizon-scanning technology
It’s all well and good talking about the theoretical advantages of horizon-scanning technology, but where is it already providing advantages in the industry?
Horizon scanning technology can be set up to provide automated regulatory alerts. No longer are your compliance team required to spend hours manually researching online for regulatory insights – they are delivered to you automatically. For example, Revolut works with CUBE to automate its compliance processes, allowing for faster growth in new territories.
Plus, your compliance technology can filter out irrelevant information – so you’re only working with data that are applicable to your company.
This technology is useful for risk management in some of the most high-risk areas. Non-compliance translates to the customer or partners that you are an untrustworthy business, ruining your reputation and chances of future revenue. Moreover, it can lead to excessive fines and other penalties.
With an already rocky history, financial services businesses need all the help they can get with regard to being viewed favorably by the public.
For example, data privacy is key and CUBE’s horizon-scanning technology lets you see every rule in the collection, processing and storage of data. So businesses get the right kinds of oversight throughout their entire operations systems without the risk of breaching GDPR, Brazil’s Lei Geral de Proteção de Dados Pessoais (LGPD), the California Consumer Privacy Act (CCPA) or any other data protection law.
Start seeing what’s on the horizon
At CUBE, we understand the complexities of regulation and know what it takes to develop the right compliance strategy.
That’s why we provide horizon-scanning technology to huge enterprises like PWC, SIONIC and Revolut. Giving their compliance teams the customized insight required to take control over regulations.
Want to transform your messy data into actionable intelligence?
Request a demo of CUBE’s horizon-scanning technology.
Keep ahead of emerging regulations by speaking to CUBE.