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RegTech: Optimising the role of the Compliance Officer

By Ralf Huber, Co-Founder, Legal & Compliance at Apiax

The role of a Compliance Officer is indeed a complex one. The International Compliance Association describes its purpose as “ensuring that all business activities are carried out within the regulatory framework”. Alongside, solutions and advice given need to reflect the company objectives and make good business sense, blocking risky moves and identifying opportunities triggered by regulatory change. 

However, even the most seasoned Compliance Officer does not have all the right answers at all times. Views and opinions on best practices often change to reflect the dynamic regulatory environment. For instance, last year approximately 220 amendments were done to existing financial services legislation – each day. It is not an understatement that careful monitoring is essential to staying on par with regulation and steering clear of risk. 

Like keeping up with the ever-evolving legal requirements, ensuring organisational alignment, mutual understanding and implementation of rules are considered an equally big challenge. Because what is really the point of understanding dos and dont’s if they will not manifest? 

Bringing together compliance with the rest of its digitalised, concurrent business functions, what benefits does technology bring to the Compliance Officer on its mission to add value to the organisation?

Digital rules: Making information talk

Rules come in many shapes and forms, notably legal opinions, policies, country manuals and internal memoranda. Although comprehensive, their scope may be too broad to reflect the individual organisation’s needs and cause confusion when distributed for compliance training. Such static, often paper-based, resources generally require high maintenance to make individual sense and keep updated. 

Replacing the above knowledge resources with digital rules allows for regulatory guidelines to be consumed in a binary, case-responsive manner across the organisation. With the right tools in place, information can be processed and presented in a way that reflects the key parameters and individual characteristics of a business activity. RegTech solutions can intelligently gather among thousands of rules in the digital library to identify those relevant to the individual’s request.

In practice, employees can learn from case-specific guidelines, formulated in yes-or-no answers and appropriate lingo. The expected outcome is a generally high compliance awareness across the organisation with fewer compliance tickets issued.

Governance & scalability: Being in two places at once

Having the ability to clone yourself does indeed sound like a dream-like scenario. But think of it this way: now that our rules have gone digital, advice can easily be replicated and repurposed across multiple different areas. 

For instance, the regulatory guidelines given on the marketing activities of a specific investment fund may be applicable to other business cases – fully or partially. In either case, the guideline was only given once. Digitalising knowledge allows for Compliance Officers to scale their expertise and maximise externally sourced knowledge to let them work where needed – over and over again.

In the digital compliance workspace, machine-readable rules can take on various different shapes and work behind the scenes of existing processes and programmes. Through API connections, rules can be fed into the workflow to automatically block or permit business actions depending on their accordance with the law. As well as a solid governance framework, digital rules create the perfect conditions for automation of processes to enable compliance by design. 

As the need for supervisory controls reduces, legal & compliance professionals regain valuable time otherwise spent on repetitive inquiries relating to the day-to-day running of the business

Looking ahead: Becoming a strategic business partner

Imagine a cockpit setting. The digital workplace enables legal & compliance professionals to control entire chains of processes through one simple system. The organisation responds as processes enabled by digital rules block or pass actions based on their compliance status. Like an autopilot, digital rules work securely and quietly behind the scenes of processes, adding an automated compliance layer to the workflow. 

While routine inquiries are being solved and organisational implementation ensured, Compliance Officers can move away from the day-to-day running of the business and instead focus their efforts on their core business objectives: managing risks on a strategic level and seizing opportunities. 

With creativity, problem solving and strong awareness of the regulatory environment, legal & compliance professionals can – and should – partake in strategic, value-add business activities and use their expertise in staying on course with the company’s growth objectives. 

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