COMPLIANCEThe Digital Imperative in Financial Services

If you think Financial Services compliance is already too costly, brace yourself. It’s going to get worse...

Much worse.

COMPLIANCE CHALLENGES

U.S. regulatory agencies have only addressed 50% of legislative changes enacted with Dodd-Frank.

KYC (Know Your Customer) and EDD (Enhanced Due Diligence) requirements are getting more complex.

You’ll now need the full attention of executives and staff to ensure compliance with these regulations.

Technology Holds the Key

Surviving the cost of compliance will require three capabilities:

Fostering greater transparency while exposing new risks

Taking advantage of resources that can simplify processes

Constituting an all-in commitment to training and cultural

adjustment

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The CustomerThe changes in customer relationships for Financial Service

providers present a number of questions.

Should service specializations continue to fuel organic growth

and focused analysis?

Should scale contribute to decisions about systems

integration and compatibility?

Should changing location or legal identity overcome some regulatory constraints?

Should product-centered businesses create internal competition across multiple lines?

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Environment & Systems

Big Data only makes this problem worse.

78% of Financial Services executives said the lack of integration across software systems and applications increases their compliance costs.

– Ben Dipietro of the Wall Street Journal

Only 46% of Financial Service firms feel they possess complete

enough processes to manage data quality.

– Cap Gemini

Successful automation requires a vision – a bigger picture of your business environment.

Organizing Regulations

Most software solutions that promise to handle new customers automatically can’t keep all your data matched up. They often can’t connect multiple accounts or purchases to one customer, and will send them messages that don’t make sense, or provide incomplete reporting.

EDD regulations require two more types of proof.

KYC regulations require 4 types of information to verify customer identity.

Meaningful Data DifferentiatorsTo keep control of all your data and automate compliance, you’ll need them organized under these three categories.

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DERIVEDKYC expects institutions to score the relationship and its risk levels, which requires information derived from facts or observations.

FACTSYou will need evidence for:

A determination of the legitimacy of an individual

The basis of their income

The names of the parties with whom the bank exchanges the funds

OBSERVATIONSImproved compliance depends on the ability to identify suspicious behavior proactively.

Systems Make a DifferenceMcKinsey found financial institutions can improve productivity

and customer service by more than 50% if they:

Integration begins with data

Data control (and compliance) improve with transparency

Automate and digitize their processes

Use software to manage the manual tasks left over (such as resource planning)

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Remember:

How to find the right approach for your organization:

Get buy-in and input from those people the changes impact

Ensure leadership understands and communicates the objectives – clearly, repeatedly and consistently

Align the objectives to strategic purposes, performance expectations and measurements

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The BPM Advantage

A dynamic platform makes it far easier to consolidate all the bits of information about your customers from all your sources.

BPM platforms are even better by unifying both data and process into a single, foundational case record.

You’ll be able to see the entire history of every customer relationship in one place.

BPM

Solve the Unpredictable as Easily as the Routine

Intelligent business process makes it easier to communicate and share the bigger picture of overall information flow, and

set up rules to solve problems before they occur.

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