The Rise of Technology in Tracking Changing Regulations
The landscape of compliance has drastically transformed over the years, particularly for Chief Compliance Officers (CCOs). Historically, CCOs dedicated about one-third of their time to tracking legislative changes. However, the increasing complexity of regulations and a shortage of qualified in-house compliance professionals has led many organizations to outsource this critical function. While outsourcing may serve as a short-term solution to cost pressures, businesses are now in search of more sustainable, long-term strategies to navigate compliance effectively.
As regulatory demands continue to grow, the necessity for fast and reliable monitoring systems has led to the advent of automation tools. Today, organizations leverage technology to identify, analyze, monitor, mitigate, and report external noncompliance risks. By automating the tracking of external data sources, companies can not only meet regulatory obligations but also develop a more robust data management strategy. This proactive approach enhances overall operational efficiency, freeing up valuable resources for other critical functions.
Accessing industry-relevant data has never been easier. Current software solutions can crawl the web to gather pertinent information, structure it into cohesive data feeds, and provide filtering and searching capabilities. This level of granularity allows compliance teams to conduct in-depth analyses without the laborious hours traditionally necessary for manual research.
The benefits of adopting automated tools for regulatory monitoring are impressive. First and foremost, automation dramatically reduces the time spent on compliance tasks, thereby increasing productivity. Additionally, these tools enable a swift identification and mitigation of potential risks, significantly lowering the chances of facing noncompliance penalties.
Automation not only speeds up the inventorying of regulations from global sources but also offers real-time notifications on newly introduced rules and changes. Enhanced tracking capabilities allow organizations to manage regulation lifecycles more effectively. Quick impact analyses become possible through the mapping of regulations to applicable controls, ensuring organizations remain well-informed and prepared to adapt to legislative shifts.
Consider a New Solution (or Approach)
Among the innovative solutions on the market, KPMG has developed a proprietary regulatory tracking tool that simplifies the regulatory tracking process and addresses common challenges. Unlike traditional tools that merely collect regulatory data, KPMG’s solution streamlines the entire compliance process—from initial tracking of obligations through to compliance testing and reporting. What sets this tool apart is its end-to-end functionality and a suite of additional features designed to maximize effectiveness.
- Monitor, Prioritize, and Action Dashboard: This dashboard includes an automatic categorization feature that classifies regulatory updates into relevant categories. Users can create and assign tasks based on these categories, ensuring nothing slips through the cracks.
- Obligation and Risk Mapping: The tool does more than just track— it reads laws and regulations to maintain an inventory of obligations while mapping them to a company’s specific risk taxonomy.
- Curated Ingestion: By filtering out irrelevant data, the tool significantly reduces the time compliance teams spend managing regulatory changes.
- Translation: The enhanced translation capabilities allow it to interpret laws in multiple languages, breaking down barriers that could hinder compliance with new regulatory requirements.
- Red-line Parsing: This unique feature provides a side-by-side comparison of active laws and proposed changes, aiding in streamlined regulatory change management.
- Workflow: An integrated workflow technology routes regulatory notifications to the relevant parties, expediting the review process and ensuring timely responses to regulatory changes.
- Tool Integration: The KPMG tool can seamlessly integrate with existing governance, risk, and compliance systems, providing a comprehensive overview of regulatory changes and their implications for the organization.
Each of these functionalities supports businesses in identifying and understanding new or altered legislation while establishing actionable compliance steps. The tool leverages AI and Gen AI technologies to tag laws to specific topics, extract regulatory obligations, summarize legislation, and align laws with compliance documentation.
In a rapidly changing business landscape, the adoption of automated regulatory monitoring tools is no longer a luxury but rather a necessity. Companies looking to stay ahead of compliance requirements will find themselves gaining competitive advantages in their respective sectors.