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RegTech: Institutionalizing Compliance & A Better Customer Experience

RegTech: Institutionalizing Compliance & A Better Customer Experience

RegTech is a critical tool for companies looking to mitigate their regulatory and reputational risk. RegTech acts as a catalyst for better customer experience and ensures that your brand is being promoted accurately everywhere it appears, monitoring for things like accurate descriptions, content misalignment, negative sentiment, brand proximity, brand use, and more.

“I’m a big believer that RegTech can do a lot to institutionalize better customer experience at companies,” said Richard Cordray, former Director of the CFPB, during a virtual discussion as part of the COMPLY Summit Series. While you still need the human touch in some of these situations, he says, automating compliance allows you to scale and have greater assurance about what’s being done in the organization or in the company’s name. 


As part 4 of this blog series, we’ll share Cordray’s insights on how RegTech mitigates risk.

Easily Identify and Remediate Red Flags with RegTech

Being able to easily identify any “red flags” or instances of non-compliance and remediate them quickly is a vital resource for a company to have, as it helps mitigate risk of investigation or enforcement actions from regulators. Not only does automating compliance show a good-faith effort to comply, but it also works as a first-line of defense-allowing compliance officers or CMOs to catch any issues before they go too far.

Monitor Your Internal Teams

From the top of the house, it’s not always easy to know what’s happening day-to-day within an organization, but, “it’s not that hard to automate certain processes and to automate the monitoring of certain processes to find those red flags,” says Cordray.

It’s easy for employees to get caught up in the end result of the work they’re doing and lose focus on the manner in which they’re actively getting to that end result.

One example that Cordray shared during our chat is bonus-driven financial incentive programs that push employees to do what management thinks needs to be done. Incentives can motivate people to perform better, but if you push them too hard, and if you’re unrealistic and not setting goals properly, you can easily incentivize the wrong behavior, prompting employees to cheat to get the right result.

RegTech can help keep an eye on how employees are interacting with consumers and ensure that they’re following the appropriate scripts and are not acting out of compliance. 

 

Monitor Your Partners and Third-Parties

One point that Cordray emphasized is that it’s important to understand that just because your company contracts out to a third party does not mean that you aren’t responsible for what they do and say on your behalf:

“I think a lot of companies are very casual about the fact that if they contracted out to a third-party, all of a sudden it isn’t their responsibility anymore – because someone else is doing it.”

Even if you do your due diligence before working with a company, you still want to monitor their marketing communications for regulatory and brand guidelines. Financial institutions are directly responsible for managing any and all activities that are conducted through third-party relationships, as well as for managing and controlling any risks that arise from the relationship-just as if they were an internal team.

Not every third party is going to operate with integrity and within your company guidelines; therefore, it’s crucial for companies to implement processes and systems that identify and assess risk, promote compliance, and hold both the third parties and the institution itself accountable.

Protect Your Organization

RegTechs that automate the monitoring for compliance are more available now than ever. Actively monitoring your organizations communications with consumers-as well as your partners’ and third parties-will allow you to mitigate risk, protect your brand, and potentially save huge amounts of money by avoiding hefty fines or enforcement actions.

And, as Cordray says,

“RegTech is inexpensive, accurate, and easy to deploy-there’s no excuse to not have monitoring, especially for bigger companies with more resources. It’s gotten to the point where it’s not that hard to do at any company and that is worth doing.”

Is your organization using a regtech platform to find those red flags? Learn how PerformLine can help you monitor your brand, teams and partners to protect your organization from regulatory and reputational risk.

author avatar
Gianna Kennedy Content Marketing Manager
Gianna is a Content Marketing Manager at PerformLine.

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