How Intelligent Process Automation Drives Compliance Resiliency

Regulators and auditors are feeling the seismic impact from COVID-19. Rising unemployment, small business failures, and widening economic disparity has brought significant operational constraints to the financial services industry. Moving in-person interactions to remote experiences has increased opportunities for fraud and made something as routine as onboarding a new employee or client a risky proposition.

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Central bank and government responses to the crisis have been a roller-coaster of constantly evolving stimulus lending programs, and have raised many questions about how loans should be granted and who qualifies. All this makes one thing certain: that the use of digital technologies is not going to return to pre-COVID use, for businesses and consumers alike.

In response, financial institutions need intelligent automation to successfully streamline remote worker and client activity, quickly adapt when compliance requirements change, find new ways to virtually verify authenticity, and remain vigilant about compliance and security, all while dealing with potential staff shortages. These were some of the topics covered in my recent fireside chat with BAI’s Chief Marketing Officer, Holly Hughes. It was a great discussion about the ways that automation technology, including artificial intelligence (AI), robotic process automation (RPA), and natural language processing (NLP), can help financial institutions reset and reimagine their business moving forward. 

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Evolving risks

Financial institutions are well versed in identifying risks, determining controls for mitigation and document approvals, and periodically reviewing and revising risk-related policies. However, the current economic outlook and simultaneous shift to remote working are pushing auditors and regulators to greater levels of scrutiny—particularly in the areas of credit risk, privacy, and security against data breaches. If financial institutions are to emerge stronger in the post COVID-19 world, they will need a sharper focus on high-risk areas and regulatory audits.

And there’s plenty at stake, if we're just talking GDPR—2020 fines were similar to 2019, at about $1.7 million. And the expanse of what the regulators are looking at is evolving—climate risk, digital currencies, technology, and innovation—the list goes on. First of all, banks need a proactive approach. They need to ensure that they truly understand their processes and have clear visibility into end-to-end compliance processes, reliable access to trusted data, and trusted technology partnerships. With clear vision, they can identify redundancies in processes and swiftly respond to regulatory changes to minimize disruptions in fulfillment.

Digital newbies

In response to the pandemic and subsequent shut-downs, 30 percent of consumers increased their mobile banking usage, while financial institutions faced an influx of new customers to onboard. To reduce friction and simplify the onboarding process, many financial institutions loosened fraud controls, particularly for digital “newbies.”

Sadly, we saw an increased focus on phishing attacks targeting this new group. Financial institutions must invest in education and focus on creating proactive communication strategies to educate their new digital client base on strengthening security hygiene practices.

Cultural shift

In financial services, long-standing conservative and traditionalist ways of thinking have sometimes stunted growth. Successful financial services institutions see that digital culture is not optional; it is a prerequisite for a successful digital transformation project. Leadership must see digital as their culture, rather than a project. It can’t be about having a digital team or a budget for digital; digital must be integrated into their core, and be seen as the duty of everyone in the bank to identify how to use digital services to touch the customer better, at lower cost, while ensuring compliance with evolving regulatory requirements.

Intelligent process automation (IPA) technologies are helping banks to improve onboarding processes, mitigate fraud, manage customer engagement processes, and more. See the latest research from IDC about digital strategies for banks and financial institutions to innovate and improve.

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