WatersTechnology Survey Report: Compliance Technology Challenges, Opportunities and What Firms Want

If you were to ask 10 Chief Compliance or Risk Officers what Governance, Risk, and Compliance (GRC) means to them practically on a day-to-day basis, you’re likely to hear 10 different answers. There will be significant overlap between firms and their overall GRC goals, but there will also be appreciable gaps because of the various types of businesses comprising the capital markets and the value they place on the discrete business processes nesting under the compliance umbrella.

 

What is clear is that GRC mandates and commitments necessary for the industry and are one of the costs of doing business for every firm. However, while some firms see GRC as a cost center and an unnecessary drain on resources, others view it as a domain from where they can realistically carve out a competitive advantage.

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ACA teamed up with WatersTechnology to determine what challenges firms face, where opportunities lay, and what firms really want. We've compiled key findings from our survey below; download the full report to learn more. 

Compliance function significant to value proposition

We asked respondents how they see their firm’s compliance function, with half of respondents indicating that it plays an integral role in winning new mandates and retaining existing business. This is a significant finding in that it highlights the importance firms place on their GRC functions: it is not just a cost of doing business, but a genuinely valuable mechanism by which buyside firms, for example, not only retain existing asset allocations but also use them as a means of attracting new capital.

Promising results from deploying new technology

New technology, such as natural language processing (NLP) and machine learning, and behavioral analytics have shown to support daily compliance functions and ease the burden of regulatory commitments. According to the survey, 50% of respondents indicated they’ve already deployed new technology as a means of augmenting their compliance functions while 20% indicated they are evaluating such technologies with the intention of implementing them in the future. This signals that firms are embracing regulatory technology as a part of their daily life and are open to incorporating these solutions to best serve their firm.

Firms want knowledgeable staff and pure technology considerations

We wanted to understand what firms want from service providers and what they value most when partnering with a compliance specialist. Results show that 57% of firms want experienced staff who understand regulatory mandates and how they impact day-to-day operations, and 43% indicated they wanted pure technology considerations, further emphasizing the importance of underlying technology to compliance efforts.

Internal and external proprietary compliance technology

Additionally, firms are open to using both internal and external technology. 60% of respondents indicated they would use either a mix of internal and external resources (33%) or would look to partner with a specialist third-party provider and rely exclusively on its expertise (27%). This finding reinforces a firm’s desire to partner with a knowledgeable and experienced provider who understands the nuances of the regulatory frameworks and how compliance technology can support it. 

Data management and quality challenges are a top pain point

According to our survey, one-third of respondents noted that data management and quality issues were a top pain point, while 23% said outdated technologies were a large concern. While legacy technology issues directly hinder firms’ abilities to process a wide range of business functions, they are by no means restricted to GRC activities. This is a key theme that has cropped up consistently across WatersTechnology’s research over the past 12–18 months, and one without an easy fix.

How we help

Automate and streamline compliance and risk management tasks with ACA’s Regulatory Technology solutions. 

ACA’s ComplianceAlpha software platform helps you automate manual tasks, identify risk through enhanced surveillance capabilities, derive deeper insights through connected data, simplify the submission of requests and disclosures for employees, and free up valuable time for more strategic, higher-value tasks. Our award-winning regulatory technology platform transforms risk and compliance management for over 1,000 leading financial services firms worldwide. By bringing together risk and compliance activities, surveillance, testing, and analytics in one platform, ComplianceAlpha provides a unified view of risks and behavior across their firm. 

Schedule a demo to see how our regulatory technology solution can help your organization digitize and transform its compliance program. 

Additional Resources

• Guide: 6 Strategies for Digitizing Your Compliance Program
• Regulatory Technology Trends to Watch for in 2022
• Webcast: ComplianceAlpha^® Regulatory Technology: What's New in 2022