Regulatory mapping is key to compliance. Are you doing it effectively? | Ascent

Regulatory mapping may mean different things to different organizations, but new RegTech tools can help you more accurately and efficiently meet all your mapping challenges while freeing your organization from the burden of manual processes.

Defining terms

As regulatory burdens increase and regulations change in response to everything from political winds to well-publicized industry failures, regulatory compliance will remain a rapidly changing and growing industry segment. 

Despite the near-universal concern about regulatory compliance, standard terminology around many common concepts is still missing. One such concept is “regulatory mapping,” a compliance term that means different things across the industry. Below are three distinct definitions we have encountered:

1) Regulatory mapping – of laws, rules and regulations to your business to determine your obligations

In this instance, regulatory mapping refers to the process of reading and analyzing voluminous regulatory text to understand exactly which specific obligations apply to your business. Whether conducted in-house by compliance personnel or outsourced, this process typically has people digging into the rules to determine which obligations are applicable to the business. Personnel will capture the firm’s baseline obligations across jurisdictions and determine which obligations are the same or similar across jurisdictions, and which are unique.

To do this, most firms create and maintain a rule register or rule inventory, i.e. a list of all the rules that apply to the business. An obligations register is a newer concept that refers specifically to a register or inventory of the specific obligations that apply to the firm, detailed down to the line level of regulation.

2) Regulatory mapping – of regulatory changes to your obligations

This definition involves compliance personnel constantly scouring regulatory websites, newsfeeds, and other sources to capture the latest rule amendments or additions and then conducting applicability analysis to determine which changes apply to your organization. 

Compliance personnel must then do the complex work of impact analysis to understand how the changes impact the firm’s existing obligations – Has an existing obligation changed in some way? Are there new obligations due to the rule change? Are any existing obligations now rendered unnecessary due to the change? 

Compliance teams must answer all of these questions before updating their rule register and obligations register accordingly. 

3) Regulatory mapping – of your obligations to your internal controls, policies, and procedures

Regulatory changes need to flow through to your controls and policies so that you can properly coordinate and execute the changes throughout the business. In this context, regulatory mapping is the process of tying your obligations to those internal controls, policies, and procedures. 

Mired in the Manual

Regulatory mapping represents a complex web of legal documentation, rule changes and internal processes. Regulatory change management is considered especially daunting as sources of regulatory change include international, national, state, and local legislative action, court decisions, and executive actions. The work of identifying these changes and dialing them in to what applies to the organization remains largely mired in manual and siloed processes.  

RegTech to the Rescue

The explosion of RegTech now provides an alternative solution to managing the challenge of regulatory mapping that does not require throwing additional personnel, time, and resources at the growing regulatory burden. The right automation tools can help alleviate much of the manual work of mapping regulatory requirements (regardless of which definition you are focused on)—but only if the tools are well-designed and implemented.

“Automation, technology, and expertise help transform the regulatory mapping and compliance functions from merely a cost center to a function that supports financially sound and efficient decision-making by capitalizing on business intelligence and supporting the commitment to appropriate compliance processes.” Compliance Week

The benefits of leveraging automation in regulatory mapping processes are many, including:

  • The ability to convert regulatory text into your specific obligations more efficiently and accurately, with less chance of human error (Ascent’s output is 99.5% accurate)
  • Streamlining the process of capturing regulatory changes relevant to your business, understanding their impact, and mapping them to your policies and controls
  • Freeing your compliance team from tedious, error-prone administrative work and increasing their focus on facilitating compliance, developing regulatory strategy, and proactively planning for regulatory change 
  • Providing a more complete understanding of your regulatory landscape, while spending less time and money
  • Reducing regulatory and reputational risk, avoiding fines, and lowering your overall cost to comply

Mapping regulatory requirements with Ascent

Ascent helps financial firms conduct all three types of regulatory mapping more accurately, efficiently, and at a lower cost. Ascent offers:

  • Automation to identify the obligations that pertain to your specific organization
  • Constant discovery of rule amendments and updates that apply to you, connected to your existing obligations so you can instantly understand the impact to your business
  • Seamless connection via API to best-in-class GRC platforms like IBM OpenPages so you can map your obligations to organizational controls, policies, and procedures

Want to learn more about accurately, efficiently, and cost-effectively keeping track of regulatory obligations? Subscribe to our monthly newsletter Cliff Notes below. 

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