According to Deloitte, compliance costs have risen by 60% for banks and other financial institutions since the 2008 recession. The situation is not much different in other industries as well. As a result, enterprises across the globe are struggling to minimize the cost of compliance under control.
Even though there are many ways to keep compliance costs in check, none are as effective as using automation and artificial intelligence. Artificial intelligence and automation can not only increase your efficiency of compliance operations but can also minimize costs. It does this by automatically grouping together compliance-related activities.
Moreover, they can send alerts about events and activities to keep you on the right track. Technologies like robotic process automation and natural language processing can have a positive impact on your productivity and efficiency too while keeping the compliance costs low.
If you are looking for ways to reduce your compliance costs by using automation and artificial intelligence then, this article is for you. In this article, you will learn about five effective ways to minimize your compliance costs by using artificial intelligence and automation.
5 Effective Ways To Slash Your Compliance Costs With Artificial Intelligence
Here are five ways you can use to cut down your compliance costs.
1. RPA and NLP
Did you know how many pages of compliance and regulatory documents an organization has to process in a year? 300 million. Yes, you read that right. Imagine collecting, sorting, manipulating, making sense of it, extracting useful insights and mapping it to key business areas manually. It is impossible, right? That is why you should leverage technologies such as natural language processing and robotic processing automation.
Robotic process automation might assist you in collecting and tracking regulatory changes. You can even use advanced optical character recognition technologies to transform all the text present in the documents into machine-readable form. Natural language processing can help you make sense of complicated regulatory terminology and sentences and what they actually mean.
Additionally, you can also harness the power of AI models to evaluate different options for making policy changes based on the previous data and use case. It can also help you filter out irrelevant regulations that do not apply to your business from regulations that directly apply or impact your business. By using all these technologies, your data scientists and business analysts can save a lot of their time. The more time they can save will automatically reduce your app development cost.
You might be wondering how much of a difference can these technologies make? To give you some perspective, here are the numbers.
- Developing and implementing a centralized data governance program have helped businesses save $3.01 million
- Conducting regular compliance audits has saved businesses $2.86 million
- Governance and compliance technologies have helped businesses save $1.43 million
- Appointing a compliance leader at a C-suite level for decision making assisted businesses in saving $1.25 million
- Implementing regulatory monitoring has enabled businesses to save $1.03 million
2. Modernize Your Regulatory Reporting
One of the first hurdles you will encounter during regulatory reporting is what to report, when and how. This is not as simple as you might think. Your business analysts will have to read, understand and interpret the regulatory requirements and then decide which of these regulatory requirements applies to their business. In addition to this, they will have to translate this information into code in order to extract useful insights and make the right decisions.
You can simplify this process by taking advantage of artificial intelligence. It can not only help you browse through tons of regulatory data but also identify useful patterns and insights so you can easily visualize what steps you need to take to meet those regulatory requirements. The best part is that it can give you different recommendations and suggestions based on changing situations. With this information, you can easily generate code snippets to trigger particular actions to automate the process.
3. Reduce The Length of Review Process For Marketing
Compliance is not just limited to security and operations. It also applies to other departments such as marketing. As businesses move towards offering a much more personalized experience to users, it will drastically increase the compliance cost. Make sure every content piece meets all the compliance and regulatory requirements otherwise, you could end up landing in hot waters. Instead of hiring people, many companies are using artificial intelligence to scan content for compliance and regulatory requirements. Not only that, some of them are even using AI to write marketing copy that complies with the regulatory requirements.
4. Minimize Errors With Continuous Transaction Monitoring
The problem with the current financial system is that it is vulnerable to false positives. This can not only waste your money but it can also waste your time. You can get over this issue by integrating artificial intelligence into those traditional transaction systems and it will drastically reduce the errors in your transactions.
More importantly, artificial intelligence can also help you prioritize compliance issues. This means that if there is a critical issue it will automatically be sent to a compliance officer for verification and correction while less dangerous issues can be resolved automatically.
5. Conduct Background and Legal Checks
The growing number of fraudulent transactions, criminal activities and money laundering incidents has forced financial institutions to be on their toes all the time. As a result, they spend days conducting background and legal checks. With AI, NLP, sentiment analysis and automation, you can take the pain out of this process and reduce it to hours. These technologies can help you easily detect any discrepancies about a person by analyzing sentiments and analyzing tons of related documents. This can limit the number of malicious activities taking place through traditional banking channels.
How do you plan to reduce your compliance costs? Do you use artificial intelligence and automation for compliance cost minimization? If yes, how? Share it with us in the comments section below.
