In the second of the Why RegTech? series, CUBE looks at how compliance has transformed from old-school notions of risk mitigation and fine avoidance – to a culture that is permeating financial institutions.
The emerging culture of compliance
As the regulatory landscape becomes more complicated and multi-layered, so too does the remit of RegTech.
Compliance is becoming a culture in itself. It is embedded within the corporate structure, from the top down. It is now a consideration at every stage of the business process and should be included in the digitization process. The ideal? An integrated and valued inclusion. It should range from initial planning and strategy development, through all phases of product or service development, to delivery and reporting.
Compliance inevitably means different things to different people. But, increasingly, the onus will extend beyond what the regulator dictates and move towards anything and everything that a bank can do to keep its customers safe, and reassure them that their data is being used securely and appropriately. This goes beyond regulation (which will continue to develop at pace) and moves into the way a firm is operating within. Financial Regulators are sharpening their focus on culture: firms are expected to meet their regulatory expectations, but if their culture suggests that staff are willing to flout the rules then how is a regulator to trust that a firm is capable of meeting broader obligations?
Compliance goes further than managing and meeting regulations, it’s about developing a culture which respects and obeys rules across the board. As compliance spreads – so too does the need for smart, automated regulatory tools.