As financial services firms look for ways to harness the power of risk & regulatory technologies (RegTech), one of the first questions that comes to mind is where to start. Different parts of the business present very different challenges and opportunities, and the activity areas you choose to focus on can have a big impact on the results. Here are some tips for getting started:
Target labor-intensive processes for RPA
Another key area for automation is risk and compliance management. High impact activities well-suited for automation in this area include assessing and sensing risks; predicting risks and regulatory changes; monitoring and testing compliance (including analysis of documents and voice files); and measurement & reporting.
If your firm already has a high degree of automation in these areas, you can pat yourself on the back and move on to other parts of the business. However, at many firms, both of these areas are still very labor-intensive and can greatly benefit from RPA, which has the potential to deliver major improvements in both efficiency and quality.
Look for mountains of data hiding valuable insights
To identify these kinds of opportunities, look for large pockets of untapped data within your business and operations, and then ask yourself what valuable insights you might find in that data if you had a magic wand that could make them appear out of thin air – because that’s essentially what NLP and ML can do.
For many firms, risk management is an area that can greatly benefit from NLP. For example, NLP can be used to determine risks hidden in textual descriptions of documents that are not fully transcribed into databases (e.g., text in insurance documents).
Think in parallel
This might mean, for example, using RPA to deal with purely manual operations such as conducting reconciliations between different mortgage datasets, while at the same time using NLP to extract analytics data from mortgage loan and income documents, and perhaps even using ML to combine those two datasets in order to generate new insights that can classify mortgage customers by profitability or risk.
Given how quickly RegTech is evolving, the potential applications and benefits are truly limitless – so it’s important to be open to new capabilities and opportunities. That being said, when starting out it is also important to focus on the here and now – using RegTech to address immediate problems and improvement opportunities that can deliver tangible results quickly. This can help build credibility, momentum, and excitement about RegTech at every level of the organization.
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