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Here’s the November issue of Ascent’s Compliance Insider!

We hope you had a filling and relaxing Thanksgiving with friends and family! As the countdown to the new year begins and you plan for 2024, we hope to provide helpful content as you review your organization’s compliance technology roadmap. Here are a few new articles and resources that can help.

Part 2 of “Pillars of Strong Compliance”
Part 1 covered compliance fundamentals, stressing corporate definition and law identification. Now, we focus on creating a centralized regulatory obligations library, empowering efficient policy and control management.

Read Part 2 here.

The Gap in the Compliance Automation Value Chain
Why must compliance teams spend so much time reading through a never-ending deluge of regulatory documents just to identify the rule changes that apply to their companies?

It comes down to automation – or the lack thereof. To explore further, take a look at what we call the “gap in the compliance automation value chain.”

Read the article here.

Analyst Report on AI-driven Compliance
Compliance analyst GRC 20/20 just published a detailed report on Ascent compliance automation software. For a deep dive into the Ascent solution, from building an obligations inventory to managing regulatory change.

Access the report here.

Regulatory Roundup
Each month, our team of regulatory compliance experts round up the latest financial services regulatory news, regulations and enforcement actions to keep you abreast of the latest in the industry. Here’s this month’s highlights:

• Cryptocurrency
• Fintech
• Rulemaking & Regulations

Read the full roundup here.

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In this post, we continue our three-part series on the essential components of a strong compliance program, as outlined in Ascent’s Regulatory Compliance Scorecard.

In our first article, we explored the foundational aspects of compliance, emphasizing the importance of defining corporate entities and identifying applicable laws, rules, and regulations. Now, as we journey further into the world of compliance, we explore the process of building an accurate, centralized regulatory obligations library – which is essential to enabling compliance teams to effectively and efficiently incorporate obligations into policies and controls.

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Creating a Tailored Inventory of Regulatory Obligations

A robust compliance program requires the creation of tailored lists of obligations for each corporate entity, drilled down to the citation level. This granular approach ensures that every regulatory obligation is explicitly documented and understood. It empowers your organization to address compliance with a level of precision that leaves no room for ambiguity.

Utilize these lists of obligations as your compliance blueprint. They provide a detailed, step-by-step guide to fulfilling your compliance responsibilities. Each obligation is like a puzzle piece, and when you fit them all together correctly, they form a complete picture of compliance.

There are numerous benefits to creating an accurate obligations inventory:

1. Clarity: Every team member knows precisely what is expected, reducing confusion and errors.
2. Accountability: When obligations are well-documented, it becomes easier to assign responsibility for their fulfillment.
3. Efficiency: With detailed obligations in hand, your organization can allocate resources more efficiently, focusing on areas of greater risk or significance.
4. Audit-Readiness: In the case of regulatory audits, having comprehensive lists of obligations ensures you can provide a detailed compliance audit trail.

Centralizing Obligations: The Repository of Compliance Knowledge

Establishing a central obligations inventory for all of your business’s regulatory obligations serves as a repository of knowledge, for well informed decision making. This library should be designed to accommodate updates, revisions, and real-time additions as regulatory requirements change.

Here’s why a central obligations library is crucial:

1. Accessibility: All relevant compliance information is in one place, accessible to authorized personnel whenever needed.
2. Consistency: Centralized data ensures that everyone in your organization is working with the same information.
3. Efficiency: When you can easily locate and retrieve compliance data, it streamlines decision-making, reporting, and auditing processes.
4. Scalability: As your organization grows or regulations change, your centralized compliance repository can expand and adapt to accommodate new obligations and requirements.

In addition to centralization, integration of your obligation library with best-in-class GRC platforms Diligent, IBM OpenPages, Onspring, and Resolver enable compliance teams to efficiently map obligations to organizational policies, procedures and controls.

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As you continue to build a strong compliance infrastructure, remember that this foundation is not static; it should evolve in step with regulatory changes and organizational growth.

In the final article of our series, we will explore how to maintain a strong compliance program by proactively monitoring the regulatory landscape for effective change management.

Why must compliance teams spend so much time reading through a never-ending deluge of regulatory documents just to identify the rule changes that apply to their companies?

It comes down to automation – or the lack thereof.

To explore further, let’s take a look at what we call the “compliance automation value chain.”

There are three essential components to the compliance automation value chain:

1.     Document collection
2.     Regulation and obligation identification
3.     Policy and control management

Until recently, only two of these components have been automated:

1. Document Collection

At the beginning of the compliance automation value chain, document vendors significantly automate horizon scanning or document collection. The challenge is that these documents provide little insight into which regulations and obligations apply to a particular company. They provide the document, and the rest is up to the compliance team, who must read through stacks of these reports, identify the changes, and then determine if and how they apply.

2. Policy and Control Management

At the back of the compliance automation value chain are technology solutions, such as GRC platforms. This is what compliance teams use to incorporate new rules and obligations into organizational policies, procedures, and workflows.  

Though effective at managing policies and procedures, GRC platforms traditionally offer no capabilities that identify the rule changes and obligations on which those policies and procedures should be based – hampering compliance teams’ ability to efficiently manage compliance policies and procedures. 

The compliance automation gap

The automation gap, which sits between these two components, is the identification of applicable rule changes and obligations. If your compliance team is like many, they’re forced to spend an enormous amount of time reading through document after document to identify their company’s regulatory obligations. 

And it’s the obligations that matter.

Completing the compliance automation value chain      

This is why we built the Ascent platform – to complete the compliance automation value chain for financial services compliance teams – to free them from reading through page after page of regulatory text to identify their company’s specific rule changes and obligations.

The Ascent platform employs AI to automatically identify and deliver company-specific rule changes and obligations from regulatory documents.  Ascent focuses on the regulatory obligations – serving only relevant information, removing the irrelevant, while surfacing a company’s applicable obligations under any given rule. 

With Ascent connected to a GRC platform, organizations benefit from a complete compliance automation solution that includes horizon scanning, obligations inventory, and policy and control management. 

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We invite you to learn more about compliance automation. Click here to schedule a call with an Ascent compliance specialist.

Welcome to the inaugural issue of Ascent’s Compliance Insider newsletter, your monthly go-to source for staying informed about the ever-evolving world of regulatory compliance. In this issue, we are excited to share a wealth of valuable information, from the latest updates on rule amendments to expert guidance on achieving compliance excellence. As always, we invite you to connect with Ascent to learn more about compliance automation and how it can transform your regulatory compliance journey.

Here’s what we covered in this month’s newsletter:

ANALYST REPORT

A Deep Dive into AI-Driven Compliance

We are thrilled to share an in-depth analyst report on Ascent’s compliance automation software. GRC 20/20, a renowned compliance analyst, has just published a comprehensive assessment of our solution. If you want to explore the full potential of the Ascent platform, from building an obligations inventory to efficiently managing regulatory changes, we encourage you to access the report by clicking [here](link-to-analyst-report).

NEW BLOG

Master the “Pillars of Strong Compliance”

In our latest blog series, “Compliance-Pillars,” we delve into what defines a superior compliance program. This three-part series provides insights into the essential pillars of a robust compliance program. In part one, we discuss the importance of defining your corporate legal entities, identifying associated products, and understanding the applicable regulations that govern them. To gain a deeper understanding, read the article [here](link-to-blog-article).

GRC PARTNER

Ascent’s Partnership with Diligent

We are excited to announce our recent partnership with Diligent, a leading GRC SaaS provider. This collaboration will empower Diligent customers to efficiently map compliance obligations to internal controls, policies, and procedures. Learn more about this partnership by clicking [here](link-to-partnership-details).

WHAT’S NEWS

Regulatory Roundup

Our “Regulatory Roundup” section features a monthly compilation of the latest news, regulations, and enforcement actions in the financial services industry. Here are some highlights from this month:

1. Emerging Enforcers: State regulators are increasingly taking a tougher stance than federal regulators. It’s essential for your organization to understand the requirements across multiple jurisdictions to ensure compliance with evolving standards and expectations.

2. Exam Priorities: The Office of the Comptroller of the Currency (OCC) has released its 2024 exam priorities. For banks, this is a critical reminder to review and align their operations with these priorities to maintain regulatory compliance. Now is the time to ensure that your organization is prepared for upcoming examinations.

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New Analyst Report Explores the Role of AI in Managing Financial Services Regulatory Change 

Noted GRC industry analyst, GRC 20/20, has researched Ascent’s AI-enabled compliance automation solution, and the new report Delivering the A.I. Enabled Regulatory Change Lifecycle is the result.

The report looks at the increasingly complex challenges financial services companies face when trying to “navigate the tsunami of regulatory change in an environment that’s a shifting tapestry of local, regional, and international laws and guidelines.”

According to the report, the daunting challenge is that financial services firms are dealing with an unprecedented volume of regulatory changes. The number of regulatory updates has more than doubled over the past five years, while compliance teams’ capabilities to manage these changes have stagnated. 

As outlined in the report, most compliance teams lack adequate processes and resources to manage the deluge of regulatory changes efficiently. Challenges range from insufficient staffing and expertise to the overwhelming number of regulatory sources. Many organizations rely on antiquated, manual workflows that lack accountability, audit trails, and efficient reporting mechanisms. 

The Role of Artificial Intelligence in Regulatory Change Management 

The report explores how AI offers avenues to tackle these challenges head-on in these ways: 

1. Automated Monitoring. AI algorithms monitor multiple sources of regulatory updates in real time, filtering out irrelevant information and prioritizing changes based on organizational relevancy.
2. Natural Language Processing (NLP). AI-driven NLP tools analyze regulatory texts, identifying clauses and conditions relevant to an organization’s operations.
3. Predictive Analysis. Machine learning models predict the potential impact of future regulatory changes, enabling proactive strategic planning.
4. Workflow Automation. AI automates the workflows related to regulatory compliance, from notifying relevant stakeholders to new rules and obligations to initiating necessary policy and process changes.
5. Risk Assessment. AI algorithms integrate regulatory compliance into broader compliance risk management strategies by analyzing how regulation changes interact with other business and operational risks.
6. Audit Trail and Reporting. AI tools maintain an auditable, real-time trail of all regulatory compliance activities, satisfying regulatory demands for accountability and transparency. 

Ascent at the forefront

The report also takes a deep dive into Ascent’s AI-enabled approach to financial services regulatory compliance and change management, and details how Ascent’s compliance automation platform employs AI to help financial services compliance teams efficiently identify their specific regulatory changes and the associated obligations.

We invite you to read the entire report to learn how organizations are employing AI to overcome today’s myriad of compliance challenges.

Compliance is the cornerstone upon which businesses build trust, stability, and longevity in an ever-evolving regulatory landscape. However, the complexity of today’s regulatory environment can make it challenging for financial services businesses to efficiently identify their regulatory obligations. 

In this three-part series, we delve into the essential components of a strong regulatory compliance program.

Here, in part one, we review two topics outlined in Ascent’s Regulatory Compliance Scorecard: 1) Defining corporate entities and 2) Identifying laws, rules and regulations that apply to your business. 

Step One: Defining Corporate Entities

The first step in crafting a rock-solid compliance program is to define your corporate legal entities and their associated products and services. This foundational step establishes a crystal-clear understanding of the scope and scale of your business operations. By mapping these entities to products and services, you gain a comprehensive view of your organizational structure, enabling a more targeted and efficient compliance initiative.

Defining corporate entities is a holistic exercise akin to creating a detailed map of your organization, allowing you to navigate the complex terrain of regulations with confidence. Furthermore, this detailed understanding enables you to allocate resources effectively, and direct compliance efforts precisely where they are needed most.

Step 2: Identifying Applicable Laws, Rules, and Regulations

Once you define your corporate entities and product offerings, the next step is to identify applicable laws, rules, and regulations. This involves conducting a comprehensive review of the regulatory landscape, with a specific focus on the industries and jurisdictions relevant to your business. This  involves meticulously mapping each of your regulatory requirements to the corresponding entities, products, and services within your business. Additionally, providing direct links to supervisory agencies ensures easy access to the primary sources of regulatory information, facilitating ongoing compliance efforts.

By establishing a clear and well-documented path through the labyrinth of regulations, you can empower your organization to operate with confidence and integrity.

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In the next article in our series, we explore the process of establishing a robust obligations library by creating tailored lists of obligations and centralizing compliance data, to ensure that your compliance program stands strong. Read part two here.

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