Regulatory change management is a critical process for any business operating in an industry that faces regular changes in federal and state level regulations. Most businesses do not have to worry about regulations too much, but those that operate in industries where the government periodically changes the rules need to make sure that they have the capability to adapt with the changes occurring in the regulatory framework.
Managing regulatory change requires knowledge and experience in understanding regulations, mitigating risks, and ensuring compliance. New regulations mean new risks to manage and new rules to comply with. Most regulatory change management work was done manually, with the regulatory experts in the organization guiding the rest of the enterprise in adapting to the changes. Modern Regtech solutions have significantly simplified the process at every step of the way.
Getting Regulatory Updates
Being aware of upcoming regulatory updates is the first step towards managing regulatory changes. The appropriate people within the organization need to be aware of the latest regulatory developments so they can proactively plan for the changes that need to be implemented. This is not too difficult a task when done manually, but there is a chance for human error. If someone working in the regulatory change meeting misses an important update it can cause problems for the business.
Regulatory change management software simplifies this by providing a feed of regulatory intelligence directly within the Regtech platform. This means that the change management team is no longer responsible for finding regulatory intelligence. The regulatory intelligence comes to them instead, making their jobs easier and ensuring that no important update is missed due to human error.
Whenever there are any regulatory changes the first thing that the change management needs to do is understand what has changed and how much it has changed. Regulations need to be deeply studied because there are often slight changes within the different sections of the regulations. This takes some time when handled manually but is an instantaneous process when Regtech has been used. The quantity of regulations that are updated do not matter – computers can compare thousands of pages within a matter of minutes and highlight all the changes that have been made.
Some Regtech solutions go a step further and attempt to parse the regulations as well. This is done to extract important insights from regulatory updates. For example, if a creditor wants to know the regulatory updates that will affect them, Regtech solutions can highlight all regulatory updates which refer to creditors.
Assessing Required Changes
The most dramatic upgrade in performance comes in the process of change assessments. Once the regulatory updates are understood, the next step for the change management team is to look at how the effects will affect the business. This is an extremely complicated and laborious task. The change management team must first understand which of the policies and documents are affected by the changes, and then determine the extent to which things have changed. Then they must create a change management plan that successfully tackles each and every effect of the regulatory updates on the organization.
This process is completely transformed with Regtech. Regtech solutions have a risk map feature which allows businesses to define the relations between risks, regulations, and internal reports and documents. This means that whenever there are regulatory updates, the system simply looks at which regulations were updated, and highlights all the risks, compliance rules, policies, reports, and documents affected by the changes. Instead of having to investigate the changes, all the required information is provided directly to the change management team.
Implementing the Changes
Implementing the required changes is a complicated task as well because it requires a lot of collaboration across the enterprise. The change management team must first explain the changes that are required then coordinate with the other departments to implement the required changes in policies and processes. Keeping track of so many regulatory activities across the organization is a challenging task and presents a lot of problems for the board as well as the change management team.
Regtech solutions simplify the process and make it easy to manage by including an activity management system within the Regtech platform. This means that all activities across the organization are being tracked in one place where the board can manage them. Instead of a sprawling mess of activities, upper management gets live updates on all activities through executive dashboards.
These are just some of the ways Regtech is transforming regulatory change management. As artificial intelligence technology evolves further, we can expect there to be even more automation in the regulatory change management domain.