COVID-19, An Opportunity for Change and Technological Innovation in Regulatory Compliance.

Covid19InnovaciónTecnologicaBlog pageimage 1Because of the regulatory changes following the COVID-19 pandemic, platforms for regulatory solutions were tested at their best. The entire world is experiencing a stage of dependence on technology and innovation. The tendency to work remotely has represented a significant challenge for financial institutions, which has led the community to implement major changes in the way regulatory reporting processes were carried out and to adapt to new work policies. COVID-19 has promoted change and technological innovation in regulatory compliance, which has helped minimize the impact of the pandemic on these processes.

However, despite the fact that there are several entities that have been applying innovative technology in their processes, there are many that still maintain various processes manually and with high dependence on human efforts, incurring numerous errors and delays in issuing reports to the regulator, which means that technological innovation in regulatory compliance is no longer negotiable. Those financial institutions that have not yet implemented new technologies will have to do so sooner or later to achieve automation of their processes and obtain greater efficiency.

The case of Argentina: New Communications “A” from the BCRA

So far in 2020, the Central Bank of the Argentine Republic (BCRA) has issued 176 “A” Communications, which represents an increase of 93% for this type of communications compared to this same time range in 2019. In other words, during the first 5 months of this year, the BCRA doubled the issuance of communications “A” compared to last year due to the effects that COVID-19 had on the economy.

Approximately 52% of the “A” Communications issued have a direct impact on the preparation of the main Liquidity and Solvency regulations, as well as the reports on the Information Regimes that financial entities must present.

Among the most relevant changes made, we can mention the modifications in the Foreign and Exchange regulations, Minimum Cash, Net Global Position in Foreign Currency, Classification of Debtors and Provisioning, Minimum Capitals, among others.

This has placed a strain on those entities that invest little or nothing in technology since they do not have enough time to adapt their systems to changes and fail to effectively address the new and changing requirements by the BCRA, which means that the technological innovation in regulatory compliance for Argentine financial entities is a primary need.

Lessons learned from COVID-19

  • Under any circumstance, entities must have allies who reiterate the commitment to provide continuity of service and operate optimally from all fronts.
  • Investment in technological innovation in regulatory compliance not only guarantees continuous and quality service, but also helps financial entities to optimize the reporting processes by 95%.
  • It is vitally important that entities have technology that guarantees the automation of their processes and independence of human efforts to avoid delays or errors in the presentation of reports due to deficiencies in data quality and data manipulation.
  • It is essential to have a flexible architecture that allows transparent monitoring of changes and that has version control capabilities and effective risk model management.
  • Financial institutions have a unique opportunity to rethink and redesign their methodology to face current challenges and prepare for a new normal.

 

AxiomSL: Change and Technological Innovation in Regulatory Compliance

With its data integrity and control platform, AxiomSL provides innovation to financial entities, which in turn satisfy all regulatory requirements and guarantee the data integrity and auditability that regulators demand.

With technological innovation in regulatory compliance, manual processes in the generation of reports on the BCRA’s information regime is almost eliminated, allowing entities to dedicate human effort to the analysis of data that will be key to decision-making.

If you want to know how AxiomSL’s innovative technology helps its clients to effectively and efficiently fulfill their regulatory commitments in a challenging time such as the one we are experiencing due to the COVID-19 pandemic, contact us here.

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