Advancement in technology has opened up incredible opportunities for an organization to
improve the efficiency and quality of its products or services. However, with that advancement, expectations of regulatory compliance grow too.
The approach to solving regulatory compliance issues is moving from human-led to more technology-driven. There are many types of data like transactional data, market and product reference data, operational, and security data.
Different teams have the responsibility to create and manage these datasets. They vary widely in terms of velocity, volume, and variety. Banks may need to perform new analytics and reporting on specific subsets or super-sets of this data to keep up with the growing data and compliance requirements.
Various Industries can use Analytics for Regulatory Compliance
Industries have designed regulations to keep the operations intact and avoid heavy losses.
This also improves the quality of products and services produced by the industry and provides room for innovation and development. To ensure that these regulations have been met, a lot of stringent steps should be taken. Sensitive industries like finance, pharmaceutical companies, manufacturing, etc. have more severe laws and rules as compared to any other industry. Various companies handle customer information which they should protect to keep the trust intact.
This is because any kind of error, fraud, and malpractice in banks, insurance companies, or even stock trading companies can cause huge monetary losses. Any miss in the pharmaceutical industry can not only cause havoc to lives but also huge damage to brand images, industry economics, and perceptions. Automotive manufacturers and heavy-machine manufacturers need to adhere to several regulations about materials used, processes followed, or post-sales trends. A lot of firms are already pushing for extensive use of data analytics for regulatory compliance.
How can analytics help in ensuring Regulatory Compliance?
Due to different cases in different industries, analytics can be used in different ways to make more compliant industries and work-places. Some of these are:
Assessment of risk data and quality metrics: A lot of standard metrics, parameters, and data streams have been designed to put some processes in place. A lot of sensitivity analysis involves critical datasets like transactional data in the finance industry or chemical formulae in manufacturing, healthcare, and pharmaceutical companies. These datasets form the basis of the operations of various industries. Analytical processes can help organizations vet and validate the accuracy of this data. Firms should then, check them for any anomalies, significant trends, make automated reporting frameworks, and even create decision boards that give insightful recommendations on the basis of the data available.
Fraud Detection: Analytical algorithms help one identify and investigate trends that might indicate fraud, anomalous behavior, probable violations of rules, and real-time analysis of both qualitative and quantitative compliance risk factors.
Improvisation of quality of goods or services produced: Firms can use advanced analytical tests to compare their products to the market standards and industry regulations. Machine learning algorithms can accelerate the process of identifying anomalies, intelligent and rule-based classification of quality of products and services, and performance prediction of the goods in the market. This will help firms to create an impact in the market without exploiting any regulatory compliance framework.
Real-time analysis of requirements and regulatory frameworks: Many industries have been rapidly changing rules and regulations. Keeping up with the same is a tough task for many firms. Deploying a data storage and analysis infrastructure can help them monitor these changing laws faster. This will create a more efficient production and marketing process for the companies. It will also help them mitigate possible losses or plan for alternatives in advance.
Ensuring internal compliance of regulations: Firms working with sensitive client information or personal data have to ensure complete regulatory compliance. They need to create different authentication levels for data access, special credentials for confidential information access, and various other rules. Analytics can help them create a real-time framework to monitor, visualize, and alert against any violation across the organization.
Creation of better and broader regulations: A lot of current regulations across industries do not cover all possible means of fraud and malpractice. This may thus, lead to unforeseen losses that no one is prepared to combat or mitigate. Data analytics can unveil the need for more refined regulations and rules. Furthermore, on the basis of insights from historical trends, industries can also design new laws and rules as they deem fit.
How can firms use analytics to ensure Regulatory Compliance?
Several measures need to be taken to integrate data analytics into the regular operations of an industry or a firm. A data-driven culture is of foremost importance for the same. Organizations need to instill
data-driven actions in all their operational and management processes. This will help them
identify and define the value of using analytics for various problems at hand. Furthermore, this will also help them create a better relationship with the customer. This is because most people have taken to the power of analytics and trust data-backed actions and insights. Additionally, it will help companies take the lead in the industry to build analytical capabilities and use them for process efficiency.
After a firm recognizes and acts upon the need for analytics in its operations, it is necessary to build the appropriate infrastructure. It needs to train the staff on using basic analytical tools, visualization platforms, and process requirements. This will help them reinforce the data-driven culture and also, create a more informed organization. Companies should integrate all data streams and records in a central framework. This database can be accessed using credentials that have been authenticated and vetted carefully. Decision-boards and dashboards help units visualize their performance and regulatory frameworks easily. Hence, teams within an enterprise should rely on such tools to ensure higher regulatory compliance.
Although, a lot of institutions have adopted analytics for regulatory compliance, many others need to leverage these actions. An Industry will be able to cut down on malpractice and violations only when there are standard practices in place.
Better frameworks and monitoring tools can provide the industry with the ability to build a safe environment. However, the personnel involved should enforce these frameworks to make a successful regulatory infrastructure.
Are you looking to transform your organization’s regulatory compliance using web data? Contact DATAHUT, your big data experts.