Survey: Only 16% of Risk Management companies are happy with their regulatory tracking vendor
Just 16% of businesses are happy with their current solution for collecting, tracking, and monitoring regulatory data, according to data uncovered in our survey report The Top Challenges of Monitoring Regulatory Risk in 2022. Our survey spoke to respondents from Regulatory Risk Management, RegTech, Regulatory Intelligence, and GRC industries, and revealed that 76% of respondents are actively in the process of changing regulatory tracking vendors.
Why are today’s businesses dissatisfied with current solutions, and what are they looking to gain by onboarding a new platform partner?
The current status quo in regulatory tracking technology
According to Forbes, compliance executives are facing greater challenges than ever before, and are in the middle of a phenomenon that Accenture has coined compressed transformation. “We are seeing five-year plans become one-year plans as companies cope with change throughout the enterprise while trying to create value and grow. Not surprisingly, compliance resources – both human and financial – are becoming overstretched.”
To understand why businesses are unhappy, let’s start by looking at these overstretched resources.
What solutions are stakeholders currently using for this essential task?
42% have a third-party solution for regulatory web data, while 38% have built their own solution in-house. In 35% of cases, our respondents have a hybrid solution, suggesting that they aren’t getting everything they need from one source. Only 33% are relying on collecting data manually in-house.
With 66% of companies already utilizing technology – and yet 84% recognizing the need for a change – what’s causing today’s regulatory intelligence industries to look elsewhere for their data?
The first challenge to call out is the sheer amount of time it takes to monitor regulatory changes, the top pain point for today’s Risk Management and RegTech teams. On average, companies are using 13 people per month to manage this task, and wasting 40 hours monitoring regulatory compliance risks.
In 25% of cases, more than 21 people are working in this area of the business, and 45% of respondents admit that more than 50 hours per month are being spent on this task.
Despite the widespread use of regulatory tracking technology, companies are still seeing dozens of hours each month being channeled into gathering and monitoring the right data.
The amount of time it takes to track regulatory data isn’t a short-term problem. The volume of data that needs to be tracked each year is only going to grow as more regulations become law, and privacy and security concerns grow. This is leading to governments around the world tightening their controls on the ability of organizations to meet and exceed compliance.
In the latest update to the U.S. Department of Justice’s Evaluation of Corporate Compliance Programs, for example, the public was told that DoJ prosecutors will now need to ask whether compliance personnel have enough access to the relevant data so that they can make changes in a timely and effective fashion, including testing and controls.
This is directly linked to the time that it takes to access relevant regulatory data, and should be a wake-up call to any compliance department.
However, instead of this problem getting better, respondents see the challenge getting worse in the coming year. At the moment, 63% of companies predict that the volume of regulatory data that they need to track will either stay the same or increase in 2023.
73% believe that they will be spending the same amount of time or more on regulatory tracking.
As companies are already drowning in this difficult task, it stands to reason that the time has come to make a change. Today’s compliance leads recognize that they can’t put up with sub-par or patchwork systems for this essential element of the business any longer, and need to make a technology change in order to assuage financial, reputational, and business risk.
To manage the urgent need, 76% have a plan already in place to move regulatory tracking vendors.
While 31% are ready to pull the trigger and will do so this year, 36% are in the earlier stages of the journey and plan to make the shift in 2023. The remaining 33% know that they need to change vendors, but don’t know exactly when they will be able to make it happen.
This could be due to an inability to find a vendor that checks all the boxes, managing the growing volume of regulatory data, as well as the need for speed and automation.
In a highly-regulated industry, this can have serious consequences for your business. Lack of compliance with KYC in finance for example could lead to the inability to sell products and services in certain regions, or cause devastating reputational damage. Due to a lack of compliance with third-party risk management (TPRM), over 50% of companies experienced at least one incident over the past 12 months.
To manage these compliance challenges, Deloitte believes that companies need to make smart investments in compliance programs that deeply embed data into the way they function. This means making regulatory tracking part of current workflows so that monitoring regulatory data for compliance requirements becomes part and parcel of the way an organization does business.
Want to dive into the data for yourself? You can download the full survey report The Top Challenges of Monitoring Regulatory Risk in 2022, and make sure to reach out to discuss how your business can better automate your regulatory tracking services with the latest, structured regulatory web data.