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However, interpretation of rules can be quite tricky. Especially, in an environment where the stakes are high, a misunderstanding due to a rule change can lead to great confusion and have a negative impact on the system. Financial institutions like banks, which are involved in major transactions in their day to day dealings often go through system overhauls that come with their own fair share of regulatory changes.
Working in accordance with the rules is critical for coherent operation within the system. When an institution like a bank goes through a change, it imposes a certain set of rules which need to be followed in order to maintain the sanctity of the system. The rapid evolution of technology standards has led to mass changes in a short span of time. In order to accommodate for these changes, rules and regulations have been altered and new rules are created. It is not easy to make wholesale changes in a system manually. Bringing in automation to the system via Regulatory Change Management Software that has in-built artificial intelligence (AI) is a great way to cope up with the increased rate of rule changes. Automation not only improves day to day operations by making RCM more efficient, it also helps in cutting the cost of compliance and gives businesses the confidence to make better decisions.
Regulatory Change Management (RCM) is a process which is devised for making sure that the organizational policies, procedures, practices, and controls are always aligned with the ever changing regulations and standards put forth by the relevant regulatory authorities or bodies.
In today’s ever evolving world, changes have become norms and are no longer regarded as exceptions. In order to implement regulatory changes manually, a lot of steps need to be carried out. Firstly, one has to identify relevant changes that need to be made in a system. After identification, assessment of the impact of such changes needs to be carried out in order to determine the required action. Once impact analysis is complete, necessary changes should be made and process, control, documentation, training and system changes must be implemented. Once the plan is chalked out, post-implementation audits should be conducted to assure compliance.
We can clearly see that the manual process is quite difficult to implement as it has multiple steps and requires the involvement of multiple parties across different departments for its accomplishment. As changes take place frequently in the current climate, it is a much better idea to automate the process instead of creating and enforcing the changes manually. The advantages of an Automated Regulatory Change Management program are listed below:
1. Provides Notification for Better Collaboration
With automated Regulatory Change Management (RCM), an organization can track regulatory updates from multiple sources. An RCM application is also useful in an enterprise as it facilitates the process of triggering alerts, automating impact assessments, documenting actions taken and setting tasks to take action on process and policy updates.
2. Cost-effective and Time Saving
Enforcing RCM manually is a time consuming and taxing task as it requires you to follow a whole lot of steps (as discussed earlier). Automating and streamlining RCM processes enables businesses to track regulatory changes in a better and more efficient way. An ARCM program powered by AI is a comprehensive tool that not only updates itself with latest changes in the regulations, it also delivers notifications to the affected business units and informs them about the new changes in time. It makes impact analysis simple and keeps itself updated through collaborative workflows. With deliverance of updates in time to the correct department, it saves time and resources and thereby helps in cutting costs.
Through our analysis above, we can clearly see the advantage of an AI powered automated system over a manual system. An independent enterprise or a financial institution like a bank should invest in an automated Regulatory Change Management Software for serving the interests of employees and managers.