COVID-19 has fundamentally changed the way people work and engage with others, bringing the adoption of new technologies at the forefront. This has prompted regulators to introduce new guidelines to address the challenges brought about the accelerated adoption of digital technologies. In Asia-Pacific, an increasingly complex regulatory environment, changing customer behaviors and the shift to digital channels brought about COVID-19 have introduced new regulatory challenges to banks, forcing the industry to embrace technology to find more efficient ways to comply. Regulators are trying to find a balance between customer protection and fostering innovation. On one hand, this rapid regulatory response has allowed banks to swiftly deploy digital solutions such as remote onboarding, but on the other, it also has extended to the list of rules banks must obey by, increasing their compliance load.
The pace of change, coupled with the increase in the complexity of regulatory reporting requirements, mean that banks are facing more and more pressure on their resources and budgets. This problem is further amplified for financial institutions spanning multiple regulatory jurisdictions. To address this, financial institutions have started embracing technologies including natural language processing (NLP), robotic process automation (RPA) and artificial intelligence (AI), applying these to an array of use cases ranging from KYC and document search to compliance tasks automation and monitoring. The goals here are to fill compliance gaps, reduce costs, get ahead of requirements, and detect risk before the regulators do. For financial institutions, benefits include a reduction in duplication in data collection and a reduction in ad-hoc reporting burden, more accurate reporting, and improved capability of real-time analysis and monitoring.