Why it is important for financial services to be compliant and pick a robust RegTech software?

Finding the most suitable financial services compliance software to navigate the wild west of ever-changing regulations can be difficult and requires a careful review of all your business needs.

How to be compliant in financial services using software

The selection of the software or RegTech solution should mainly depend on the needs of the compliance team. Below covers a non-exhaustive list of three challenges faced by a compliance officers today:

1. Consumer Protection

Financial services are where people put their hard-earned money, where they put their trust for their future and where they hope to find security for their financial wellbeing. This can quickly be shattered if a firm does not take its responsibility to its customers seriously.

Following the Silicon Valley Bank (SVB) disaster, consumer protection laws are back in the spotlight.

In the United States, Federal Consumer Protection Laws enforced by the Consumer Financial Protection Bureau (CFPB), which was created by the Dodd–Frank Wall Street Reform and Consumer Protection Act. The same Act that was amended and is now mentioned as one of issues that led to SVB’s downfall. CUBE discussed these concerns around supervision of regional banks with industry experts, for more information listen in on our webinar.

The CFPB implements and enforces rules for financial institutions, investigates both bank and non-bank financial institutions, monitors and reports on markets, and manages consumer complaints.

The recent events bring concerns over consumer protection back to the forefront and compliance officers should prepare for greater scrutiny.

In the UK, consumer protection is already in focus with the new Consumer Duty deadline fast approaching. The finalised guidance expects firms to have implemented the rules for open products and services by the end of July 2023, and for closed books of business by the end of July 2024. The new Duty affects all firms which distribute or manufacture products and/or services to retail customers. It brings with it some key concerns for compliance officers: 

• Building a framework that effectively identifies consumer outcomes.
• The use of data and KPIs to clearly show the outcomes for consumers at all stages of the customer journey will be challenging if the data and technology is not appropriately leveraged.
• The impact on staff and personal accountability structure will be significant.

These are a sample of some of the considerations that compliance teams need to be alert to. In order to stay compliant with consumer protection rules, financial services should consider software tools such as CUBE to support their daily work and free up time to implement these new measures.

2. Combating Cyber Attacks

Firms often struggle to adapt to the ever-changing world of technology. This can open them up to being vulnerable to cyberattacks. Hackers go where the money is, which makes financial services  a common target for cyber-attacks.

Unlike the European Union, the US does not have a single federal law on cybersecurity and privacy. There is a number of different state regulations that need to be considered on a federal level and a individual state level, including CCPA, CPA, Sarbanes-Oxley (SOX), SEC rule 30 and a host of other relevant legislation.

In Europe, although codified in one legislation the GDPR, it can be difficult to navigate the intricacies of the legislation and its implementation only commits member states to a minimum standard, however, it does not prevent them from making legislation that goes beyond what is required by the GDPR.

Adjusting and navigating these legislations can be time consuming. Time that could be better spent working on the implementation details to prevent data breaches. Financial services might struggle to keep up with the details and related legislation to cyber security, making being compliant difficult.  

3. Controlling compliance costs

The cost of compliance is significant and can get out of control as the regulations keep on coming, meaning an expansion of the compliance team is no longer nice to have but a necessity. This is where a RegTech solution, such as CUBE, can remove some of that financial burden and increase operational efficiency.

What is a compliance software?

A compliance software is a tool to support compliance teams with their obligations under various regulations, standards and other legal requirements.

It aims to reduce costs, increase efficiency and free up time to focus on other important tasks.

What can CUBE do?

An automated regulatory intelligence solution, such as CUBE, can take regulations, standardise it, make sense of it and adjust it to your business profile.

CUBE has the ability to monitor the regulatory landscape and provide compliance officers with a heads up for new regulations by tracking over 5,000 issuing bodies all across the world. It is capable of translating the rules and regulations of those issuing bodies. It also automatically extracts obligations from the regulatory text, informing compliance officers of the next task that they need to ensure compliance.

It is designed to make a compliance officer’s job easier, ensure that the firm remains compliant, while reducing costs and time spend on keeping up to date with regulatory changes.

Keep ahead of emerging regulations by speaking to CUBE.