Methodology and Bottomline

methodThe RegComTech® Solution, Methodology and the Bottom Line

 

Regulatory compliance requirements such as Basel, Solvency, MiFID, KYC, etc., require banks and financial services and other organisations to go thru some compliance components and to set aside sufficient capital to act as a buffer against operational risk events. These compliance components and capital allocation are not limited to banks and financial services institutions. Most organisations across industries strive to comply and optimise capital allocation across business units in a way that is beneficial to stakeholders.

RegComTech-Methodology

 

  1. Cost Savings

RegComTech® can be a significant cost saver due to the integrated focus on processes, systems and optimization. While Governance, Risk and Compliance activities are often viewed as an expense, the RegComTech® approach can contribute to significant compliance cost savings. The RegComTech® view is to leverage data from GRC management processes to determine the need for change, automation, duplication and process optimisation thru roadmaps and frameworks.

A robust RegComTech® ERM program is structured, and well-thought-out with implemented controls can help keep GRC liabilities in check. The mere existence of such a program, backed by reliable data, is the basis for measuring, managing, and monitoring the risk component of GRC and RegComTech®.

The integrated and streamlined approach of RegComTech® brings together, standardises and systematises the GRC controls and processes. Redundancies are eliminated by activity and control ownership based on the ownership and stewardship framework.

The starting point is the area of monitoring testing because a single control is often tested multiple times by various groups e.g. an information security control is tested by Finance, IT, internal and external auditors.

  • The RegComTech® leveraged “risk-based approach” involves assessing the risk compensation in comparison to other business risks based on a heat-map.
  • The RegComTech® “risk prioritisation” is an integral part of an effective enterprise risk management (ERM) program. The approach facilitates allocation of resources and attention, and the RegComTech® ERM program will organise the GRC responsibilities.

Even though obvious overlaps and duplication exist, integration and limited data prevents management from getting a clear picture of how to address duplication that dilutes stewardship, gives unclear accountability responses, and results in wasted costs and efforts.

Another cost saver is through integrated RegComTech® that replaces multiple siloed technology systems (e.g., the entire supply chain compliance system) with a standard RegComTech® framework that extends across the enterprise to manage processes, systems and people more collaboratively.

 

  1. Enhanced Profitability and Capital Allocation

The RegComTech® risk assessments provide individual compliance by trade and play a key role here by providing an accurate picture of expected and unexpected risk fatalities.  Based on the evaluation results including a probability and impact analysis of risks, management can decide on the risk appetite, capital allocations or in fact decide on encouraging risk-taking, if that is an option.

The RegComTech® risk-control assessments will determine if current controls are sufficient to either mitigate risk or provide risk intelligence to optimise risk management. The risk intelligence component of RegComTech® does more than define the number of adequate controls; it reveals residual risks, control effectiveness, the level of risk appetite so that management can seize the opportunities and plan to optimise resources.

The centralised approach by RegComTech® enables enterprise-level tracking and identification on how to improve or fix controls associated with the areas of greatest risk.

 

  1. Greater Oversight, Accountability and Transparency

Most business and GRC processes are complex with multiple systems, people, hierarchies, sectors of activity, suppliers/vendors and operations. RegComTech® addresses the complexity and ensures accountability, transparency and oversight for smarter and informed strategic decisions. RegComTech® leverages enterprise risk heat maps that highlight areas of concern across qualitative and quantitative risk factors

RegComTech® provides a complete and integrated view of enterprise risk management including processes and systems to fostering greater risk collaboration, harmonisation and standardisation across the entire enterprise — including suppliers, vendors and business partners.

 

  1. Improved Resiliency

RegComTech® activities do not operate in silos, but collaboration or sharing of information is the key. Risk data, controls or audit data will no longer be managed and stored in multiple spreadsheets or different systems.

RegComTech® approach without silos and inefficiency provides the platform to locate data easily and quickly. Regcomtech addresses the compounded challenges of relocated employees or functions, or if the organisation needs access to data on priority including business continuity or Disaster Recovery regulations issues.

The integrated RegComTech® system, data management is organised, efficient and convenient. All risk or compliance related data may be retained in a single, centralised, enterprise-level framework. Organisations can consequently become more resilient to staffing changes and attrition.