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What is horizon scanning for compliance?
Regulatory change is constant. For compliance teams, it’s imperative to keep ahead and anticipate risks before they materialise. This is where horizon scanning becomes a necessity.
What is horizon scanning in compliance?
Compliance risks are innumerable, ranging from failure to properly implement regulations to events including money-laundering, insider trading and hacking scandals. Horizon scanning is the means of looking to the future to ascertain what challenges it might hold. In terms of compliance, this means looking ahead to anticipate the regulatory changes that might come into play, so that a firm is ready to implement such changes from the first day that they come into force.
The scale of change can differ; some changes are small and relatively easy to manage, other changes (MiFID II or GDPR, for example) touch every corner of business operations; requiring advanced and considered forward planning. Without continuous horizon scanning, and the ability to assess the impact of upcoming regulatory change on a firm, gaps arise and policies and procedures quickly become obsolete and non-compliant.
Where does RegTech come in?
Anticipating, identifying, and understanding the impact of upcoming regulatory change (new regulations, legislation, guidance, and updates from around the world) is a critical capability for every financial services organization. Since 2008, the global financial services sector has seen more than 50,000 new rules and regulations come into force – equating to one new regulation every twelve minutes.
With this explosion of regulations across all fields of finance – from ESG to data privacy in the US – manual processes are proving ineffective as they require vast teams to trawl through countless data sources. It is for this reason that compliance teams are turning to regulatory technology (RegTech) and regulatory intelligence, which automates previously administrative, manual tasks to ensure consistent, efficient horizon scanning is carried out instantaneously and constantly. RegTech removes room for human error and mitigates the worry that there may be gaps in regulatory inventories.
Find out how CUBE enables effective horizon scanning.