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How Compliance Software Companies Benefit Financial Institutions

How Compliance Software Companies Benefit Financial Institutions

Aside from the healthcare space, the financial sector is one of the most highly regulated industries, and as such, business leaders are left to consider strategies for effectively achieving and maintaining full regulatory compliance. 

There is a broad range of regulatory compliance software companies that offer comprehensive digital solutions for financial institutions (amongst others). However acquiring, implementing, and deploying regulatory compliance software — as a stand-alone or as a component of a broader risk management software system — can be costly, time-consuming, and operationally challenging. As a result, this can leave business leaders wondering if it’s truly worthwhile to reach out to regulatory compliance software companies. Will it bring a tangible benefit and generate a sufficient ROI? It’s a fair question, so let’s examine how compliance software companies benefit financial institutions that are seeking risk management tools to help avoid non-compliance fines and penalties.  

The Financial Institution’s Regulatory Compliance Landscape

Banks, lenders, investment firms, and even financial advisors and consultants are subject to stringent regulatory oversight by a number of government and private organizations. These groups have the power to impose tremendous fines and penalties for non-compliance, resulting in significant damage financially, operationally, and in terms of the financial institution’s public image. 

Take the case of nearly a dozen major banks that were recently slapped with nearly $2 billion dollars in fines by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). The fines were issued after banks — including Goldman Sachs, Morgan Stanley, Bank of America, Barclays, Credit Suisse, Deutsche Bank, Cantor Fitzgerald & Co, Citigroup, Nomura Holdings, Inc., and UBS Group, amongst others — allegedly used consumer-grade messaging apps like WhatsApp, Signal and iMessage to communicate with clients. The problem: these messaging apps do not allow for the type of message data retention that is required to comply with recordkeeping requirements. This is what led to a collective $1.8 billion in fines for these financial industry heavyweights. 

For a smaller institution, these fines can be financially devastating; even larger corporations are going to feel the pain of a regulatory non-compliance fine that’s north of $200 million. With such high stakes, it should be no surprise that regulatory compliance has become an increasingly important part of most companies’ risk management strategy. Risk management and regulatory compliance software is a key tool for getting and staying compliant and there are a number of benefits to working with a top compliance software development company. 

Benefit #1 – Developing Customized Compliance Software 

One of the most significant benefits of working with a reputable regulatory compliance software company is the opportunity to customize a platform to suit your unique needs. There is no one-size-fits-all solution in the world of enterprise software and compliance software is no different. The top developers will offer customization or they can refer you to a partner who is experienced with this type of modification. 

Some of the more complex risk management software platforms — which include regulatory compliance modules — are not plug-and-play out of the box, so to speak. These comprehensive software systems require assistance from an implementation partner who can configure the interface to suit the company’s unique needs. The top compliance software companies will have a number of vetted and verified implementation partners that they can recommend to financial institutions. 

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Benefit #2 – Regulatory Compliance Software Integration

A well-architected risk management and regulatory compliance software platform will include integrations with other third-party systems and platforms. 

An integration allows the compliance software to communicate with other software platforms and portals, allowing for the exchange of information. This way, you don’t need to consult multiple platforms for metrics and data; it’s all centralized in one location such as a dashboard within the compliance software interface.  

It is not uncommon for a regulatory compliance software system to come with a number of in-built integrations that can be activated as needed. For example, most regulatory compliance software features a feed that pulls information from various sources to generate alerts about important industry-specific regulatory changes.

But integrations with a company’s custom enterprise software platforms and ERP systems can be more challenging. In these cases, you can work directly with the developer to achieve these integrations or they can recommend a reputable partner who can perform the necessary modifications to the compliance software. 

Benefit #3 – Regulatory Compliance Software With Robust Security Features 

The best compliance software companies have a firm understanding of the financial sector’s exceptional security requirements. Financial institutions have some of the most extreme needs when it comes to digital security measures and this extends into all aspects of their technology, including a regulatory compliance software platform. This system may include sensitive data that must be protected at all times. 

Each financial institution’s security-related IT infrastructure and configurations are unique to some degree. By working with one of the best compliance software companies, a company can rest assured knowing that their new platform is safe and secure. Top compliance software developers are typically willing to provide customization solutions in cases where additional security measures are needed. 

To this end, a financial institution must ensure that everyone who is working with their compliance software is properly vetted. Third-party risk management software systems (TPRM) — which are another common component of some larger, more comprehensive risk management software platforms —  serve as an effective tool for researching and vetting vendors or other third parties. A reputable compliance software company understands the extreme threat that third parties pose to a financial institution. Therefore, most top development companies should be willing to confirm that they perform background checks and routine background monitoring for their staff. 

If a financial institution opts to work with a third-party service provider, such as an integration or implementation partner, it is prudent to run these individuals through a TPRM software system. This is an important aspect of effective risk management for a company in a high-risk industry such as the financial sector, especially when it comes to individuals who will be working directly with the financial institution’s technology. 

There are many ways in which the best compliance software companies benefit financial institutions and the ROI can be significant when you deploy a well-built software solution to manage regulatory compliance. But finding the ideal regulatory compliance software development company can be a challenge since each software system is unique. 

At iTech, risk management is one of our areas of specialty, as we develop highly secure and innovative enterprise risk management solutions. These solutions span the gamut from regulatory compliance software systems to governance, risk, and compliance (GRC) software and highly specialized industry-specific platforms. We invite you to contact the iTech team today to discuss your company’s risk management needs and we’ll collaborate on the development of a secure, user-friendly software solution that will help your financial institution achieve and maintain full regulatory compliance.