Financial services compliance departments should accelerate their uptake of new technologies such as artificial intelligence (AI), Natural Language Processing (NLP) and RegTech solutions to cut costs, according to Accenture.
A survey of 151 compliance executives at financial services institutions found that over two-thirds (68 per cent) of their compliance departments are facing a cost reduction target, while 69 percent of these looking to make savings of between 10 and 20 per cent over the next three years.
The report noted that the largest catalyst for transformation in compliance departments is improving agility and responsiveness to business growth needs, with nearly a third (32 per cent) of respondents saying that changes in financial technology such as Open Banking are prompting the launch of new products and services, including blockchain solutions, end-to-end client lifecycle management and automated investment advice.
In addition, two fifths of respondents said their company’s unmanaged employee attrition rate is higher than expected.
This finding in particular prompted the report’s authors to stress the “urgency” to embrace innovative technologies, including NLP and AI, that can enhance compliance employees’ skill sets and knowledge, and help them to better guide the business with privacy and third-party regulation.
Steve Culp, a senior managing director at Accenture and head of the company’s Finance & Risk practice, said: “As financial services clients seek more tailored and instant experiences and the pace of digital innovation accelerates, the approaches to compliance that were formed coming out of the global financial crisis are no longer fit for purpose.”
As a result, Culp recommended that compliance departments should pivot faster to execute their digital strategies and improve the impact and effectiveness.
He added: “This requires bold leadership and large-scale transformation through AI, data and analytics, and RegTech, alongside greater collaboration with industry peers to drive down ownership costs in areas such as anti-money laundering and regulatory change.”
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