Compliance teams, often overlooked, understaffed, and under-appreciated for their contributions to companies, remain committed to investing in new compliance technology to help them meet the onslaught of new regulations, according to a new survey from Clausematch, a global RegTech developing solutions for regulatory compliance.
As more government agencies announce their intent to craft new regulations on environmental, social, and governance, as well as climate, cyber security, and data privacy, almost half of compliance professionals surveyed are optimistic that their technology budgets will increase in 2023 to keep up with the demand.
Investing in the right technology, such as RegTech solutions capitalizing on artificial intelligence, said Kieran LeBlanc, Clausematch Senior Product Manager, can help address barriers such as budget restrictions, limited headcount, and manual processes, all of which were cited as challenges in the survey.
Speaking during a webinar discussing the survey results and 2023 trends in compliance technology this week, LeBlanc noted AI capabilities have improved quickly over the years, in applications such as image recognition, human gameplay, and, most recently, generative AI, in the likes of now-surging ChaptGPT.
“Individuals and companies are sharing more and more open source information, and that includes both data sets and AI algorithms needed to train AI models,” said LeBlanc. “This public awareness of AI capabilities increases the generation of ideas about how they can be used to solve business problems.”
According to a recent NewVantage survey, nine out of ten leading businesses said they invest in artificial intelligence. Businesses are also becoming more interested in the role of internal bots for helping meet compliance requirements, according to Sarah-Rose Perry, Head of Compliance for Octupus Investments. But she warned bots will not replace the role of humans.
“The reason why I got into compliance is because it’s constantly challenging me and stretching me, because the regulations change and so do the products,” said Perry. “You couldn’t have a bot that would be so smart that it’ll be able to interpret what the FDA is saying in their papers, because it needs that smart, human-level to interpret regulatory texts to examine how it’s fitting into business models.”
Among the types of RegTech solutions compliance professionals are looking to invest in this year, compliance monitoring, risk management, and regulatory change management topped the list, according to the survey. With the growing volume, speed, and complexity of new regulations impacting businesses, it’s no surprise compliance professionals seek strong solutions to assist in managing regulatory change, said Jilaine Bauer, Regulatory Advisor for Ascent RegTech.
“Turbulence and disruption are constants. Regulatory parameters are also rapidly changing and expanding, and they’re not always in sync with financial innovation,” said Bauer.
Additionally, almost half of the respondents in the survey said they are comfortable with shifting to cloud-based compliance technology. Others said they are becoming more open to this type of technology than before.
Clausematch collected data from 75 organizations across the UK, Europe, North America, the Middle East, Asia, and Australia. Read the full report on the findings in the ebook here.