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Compliance: The Digital Imperative in Financial Services


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If you think financial services compliance is already too costly, brace yourself. It’s going to get worse…much worse. Regulatory compliance, the demands of KYC (Know Your Customer) and EDD (Enhanced Due Diligence) all continue to be top of mind for every financial service executive, and for good reason.

Learn more about how to meet these challenges while advancing your digital transformation efforts in this Executive Perspective:

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Compliance: The Digital Imperative in Financial Services

  1. 1. COMPLIANCE The Digital Imperative in Financial Services
  2. 2. 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.
  3. 3. 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.
  4. 4. 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 1. 2. 3.
  5. 5. The Customer The 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? ? ? ? ?
  6. 6. 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
  7. 7. 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.
  8. 8. Meaningful Data Differentiators To keep control of all your data and automate compliance, you’ll need them organized under these three categories. 1. 2. 3. DERIVED KYC expects institutions to score the relationship and its risk levels, which requires information derived from facts or observations. FACTS You 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 OBSERVATIONS Improved compliance depends on the ability to identify suspicious behavior proactively.
  9. 9. Systems Make a Difference McKinsey 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) 1. 2. Remember:
  10. 10. 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 1. 2. 3.
  11. 11. 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
  12. 12. 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. Contact Appian Today
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