You may be interested in our webinar-on-demand about compliance automation for corporate services, trust and fund administrators in Asia Pacific. If you’d like to watch it’s easy – just click here.
We look at the topic from a variety of perspectives. How can it reduce time and risk? Which manual processes can be automated, and what are the business benefits of doing so? What areas are best tackled manually, and which are best served by automation and software?
I wanted to use this blog to look at the bigger picture and ask the ‘why?’s around automation in the field of regulatory compliance. This way I can set the scene for the webinar by answering:
1. Why does compliance need to be measured against financial penalties, and what impact can automation make?
2. Why might automation help tackle Asia Pacific's post-Covid talent shortage?
3. Why will all of this help you – a corporate services and/or fund administration business – adapt to forthcoming, often complex regulatory change?
One of my daily bookmarked news outlets, finews.asia magazine recently tackled this exact question in a piece entitled APAC Financiers Most Likely to Opt for Fines Over Compliance, explaining that:
Asia Pacific financial institutions were most likely to consciously violate rules and incur anti-money laundering fines rather than comply with regulation compared to those in other regions, according to a recent survey.
The article sprung from a survey of 600 senior decision-makers, for ComplyAdvantage’s The State of Financial Crime report, who admitted they would "consciously chose to violate rules and incur anti-money laundering fines ‘all the time’, ‘regularly’ and/or ‘occasionally’. The breakdown of APAC versus the global view is particularly interesting:
• Australia: 95%
• Hong Kong: 90%
• Global av.: 80%
• North America: 79%
• Europe: 76%
• Singapore: 72%
I would suggest that, if a business feels that it’s easier to face a fine than comply to regional and/or jurisdictional financial legislation, then we need to find a different way to handle compliance. That could be a different process, a different team, or a completely different approach. I’ll expand on this point during the webinar.
Perhaps the first question to ask is, is there even a post-Covid talent shortage in APAC? One of my go-to sources for fintech news in our region, The Asset suggests there is, and that it should be a key concern for those in the wealth and family office space in which TrustQuay operates.
Reporting from the Asian Financial Forum in Hong Kong, The Asset's Daniel Yu explains that "Family offices in Asia are growing, but their biggest challenge is a shortage of talent exacerbated over the past two years by Covid-related travel restrictions."
Daniel Yu spoke to Katy Yung, managing partner at the Honk Kong-based Sustainable Finance Initiative who explained how, for them, "There is a bit of a talent gap: hiring the right professionals that understand the nexus of finance, impact and ESG.”
My view is that we’re in an era in which businesses are tasked with 'doing more with less'. Not just because of Covid but also other constraints around budget and workforce. Consequently, it’s the right time to properly investigate software-based automation of key activities. As a result, the skills and talent you already have in-house can be best retained, and best focussed on the most productive and rewarding tasks.
For a handle on regulatory change and what the future holds, one of the key reports we turn to is Deloitte’s Asia Pacific Financial Services Regulatory Outlook. Their most recent edition provides a very detailed analysis of Business Model Transformation that points to the need for compliance automation as an example of how:
“Thinking… has shifted from ‘what do we do now’… to ‘what comes next… IE measures that can set up (an) organisation to succeed and thrive.”
“Firms should consider the questions regulators will ask as they integrate new technology into their BAU,” Deloitte’s report explains, providing three key examples which we’ll be sure to cover in our webinar:
1. Efficacy – “does the technology solve a problem or deliver better outcomes than the current process?”
2. Auditability – “is the process you are using explainable and auditable?”
3. Onboarding – “how are firms onboarding people in a fully digital space – are employees getting the right training and absorbing the appropriate culture to operate in the organisation, and are customers adequately screened?”
Watch the webinar and please leave your feedback below.
Greg is Head of Asia Pacific at TrustQuay