The AI Book

CHAPTER 63Technology for Regulations and Compliance: Fit4Future!

By Poornima Bushpala¹

¹VP Operational Risk and Control, Wells Fargo

The regulatory and legal process in the financial world has been about semantics, and experts believe that it has been linear primarily because the industry had no other option but to hold still with old technology until new technology transformed the financial sector.

Globally, we have 750+ regulatory bodies generating an average 200+ daily regulatory alerts and approximately 2500 compliance rule books. Regulatory spend by complying organizations is counted in the billions of dollars annually and these investments were predominantly in hiring talent, creating manual workflows and processes to meet regulatory policy requirements.

Significant incidents like 2017’s Equifax data breach and the Securities and Exchange Commission (SEC) violations in the US banking industry, coupled with the lack of available skilled resources, forced financial institutions to strengthen their risk management framework by leveraging technology. This gave birth to the regulatory technology called “RegTech”.

RegTech addresses regulatory challenges and facilitates the delivery of compliance requirements, which include both new and existing rules, regulations, sanctions and industry-specific guidance as prescribed by the respective regulatory body. Examples include (a) self-service software that lets legal professionals generate organizationally compliant contracts and ...