The Business Case for Regtech Every Compliance Officer Can Make

4/21/2021

As first seen on CUInsight.com. Author: ViClarity Global CEO Miriam De Dios Woodward.


If the pandemic taught us anything, it’s that successful organizations are nimble. They are experts at adapting quickly to changes in the environment, beating their competitors in the game of relevancy. Although an organization’s leadership and culture are crucial to rapid adaptation, a strong technology infrastructure is also paramount to moving quickly to address unexpected market realities. 

COVID-19 illuminated technology strengths and weaknesses, causing many credit unions to accelerate their plans for adopting new or updating outdated systems, software and processes. But, technology implementations don’t happen overnight. In fact, they may not happen for years beyond the realization of a need. 

Three Popular Excuses for Failing to Integrate New Technology 

In most cases, technology adoption is slowed by one or more of three common beliefs, which may come from experiences of implementation that went wrong. First, technology is assumed to be outside budgetary bounds. Second, implementation is perceived as overly complex. Third, technology selection and onboarding are sometimes thought of as creating too much additional work for staff. 

One way to combat these objections is by uncovering and then shining a bright light on the process gaps and manual challenges of the status quo. Every credit union – heck, every organization – has them, even those farther along on the journey to digital transformation. Although technology has found its way into more places, a great number of credit unions still rely on manual processes to gather and report business-critical data, especially within governance, risk and compliance (GRC) functions. 

As a credit union grows, however, manual processes can become a hindrance to productivity and accuracy – not something the average credit union compliance department can afford. Not only are manual processes prone to human error; they also innately rely on a person or group of people. Obviously, that dependency can become a real problem for credit unions when GRC staff depart or their roles change. 

Red Flags of Overreliance on Manual Processes

Risk management and compliance processes are structural requirements of any business. Having a team of experts on staff may provide bench strength, but relying on those employees alone to fulfill required processes may create a liability. 

Here are a few red flags your credit union may be missing out by delaying the integration of GRC technology:

  • Only one GRC pro knows how to perform a critical function. 
  • Manual processes (read: spreadsheets) were built by someone who no longer works for the credit union. 
  • GRC teams don’t understand how or where data they rely on is coming from.  
  • Reporting is inconsistent and timely to produce. 
  • Only one person at a time can make changes within a shared review process. 

Once the inefficiencies and opportunity costs of failing to automate GRC functions are exposed, decision makers are often willing to take a harder look at actual expenses, complexities and time investment of integrating technology.  

Working the Bright Side into Tech Proposals

Of course, no proposal for change is complete simply by pointing out the negatives. GRC pros lobbying for the integration of technology should also communicate the positives. While no process or system is perfect all the time, the automation that comes from GRC technology can create greater efficiency, increase productivity and set the credit union up for greater or faster growth. 

Other benefits of integrating technology into a GRC function include more reliable data and reporting, nimble processes that can adapt to changing environments, reduced human error and subjectivity and even greater outcomes from reallocating staff time to more strategic initiatives. How much time can be saved by integrating GRC automation is variable, of course. But in at least one study, GRC teams reported an average time savings of 60 percent after implementing a cloud-based risk and compliance management solution.

3 Considerations for Successful Technology Integration

Once buy-in is secured, and GRC pros can start the process of acquiring new technology, there are a few things to keep in mind to ensure the eventual technology implementation goes smoothly. 

One of these is defining the scope of the project early, before GRC pros even reach out to potential partners. It’s important to gather all relevant internal stakeholders to set expectations from the outset. This exercise is especially important to help avoid scope creep and ensure the internal team has alignment before outside vendors are consulted.

A second consideration is being intentional about adopting a “progress over perfection” mindset. Digital-native fintechs, the kind that credit unions are increasingly competing with for member loyalty, don’t have to start at 100 percent with a new technology on Day 1. Create a priority list for implementation. Address those manual processes that will save the most time and money first. You can always add on later.

After identifying the right technology partner, credit unions should work closely with the vendor to create a project roadmap with timelines. This step will reduce the likelihood of unforeseen roadblocks popping up during the process. Assigning internal advocates who take project management ownership of a particular phase of implementation is a great way to maintain communication and keep the project on time. Technology should never be implemented in a vacuum; every impacted area should be encouraged to provide feedback.

Early buy-in from the leaders of a credit union is the most important component of cultivating change, technology or otherwise. That said, getting the nod is just the beginning. GRC pros would be wise to stay focused and strategic from buy-in through onboarding. By thinking through each step of the process, communicating openly throughout and scaling slowly as quick wins dictate, GRC teams will adequately balance the human and technology capabilities needed to thrive in a post-pandemic world.  


For more tips on securing buy-in for technology investment, credit union GRC pros are invited to download the e-book, Making a Business Case for Technology

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