In recent years, RegTech platforms have emerged as a critical innovation in compliance management. These platforms leverage advanced technologies to streamline regulatory processes, ensuring that organizations can meet their compliance obligations more efficiently and accurately. RegTech platforms automate routine tasks, enhance data accuracy, and provide real-time insights, making compliance less burdensome and more effective. In India, the adoption of Robotic Process Automation (RPA) and Artificial Intelligence (AI) within RegTech solutions is revolutionizing how compliance management is conducted, driving significant improvements in productivity and reliability.
The landscape of compliance management in India is undergoing a significant transformation due to the advent of advanced technologies such as RPA and AI. These technologies are reshaping RegTech platforms, making compliance processes more efficient, accurate, and less dependent on human intervention.
RegTech platforms are designed to streamline various compliance activities, such as performing verifications and validations, generating forms and formats, and providing dashboards and Management Information Systems (MIS). They also deliver alerts and notifications on critical activities and deadlines. To achieve seamless data transfer, these platforms securely integrate with various source systems and, in some cases, with destination systems for consolidation, governance, and global reporting.
RPA plays a pivotal role in enhancing the efficiency of compliance management. It facilitates data transfer between platforms and source/destination systems when direct integration is not feasible or preferred. Additionally, RPA performs logical calculations, reconciliations, data extraction, verifications, content structuring, and information dissemination automatically. This automation of repetitive and rule-based tasks allows compliance professionals to focus on more strategic activities. For instance, RPA can extract data from multiple systems, perform necessary calculations, and input the processed information into the RegTech platform. This significantly reduces the time and effort required for these tasks, leading to substantial efficiency gains.
AI introduces automated decision-making processes within RegTech platforms. It defines and executes triggers in the workflow, ensuring timely actions based on specific conditions. This reduces the dependency on human decision-making and enhances execution timelines. AI enhances RegTech platforms’ ability to identify patterns and anomalies in large datasets, improving the accuracy and reliability of compliance activities. It can also predict potential compliance risks and recommend corrective actions, thereby preventing issues before they arise.
Let’s understand the combined impact of AI and RPA in streamlining the compliance process with a situational example. During an audit, RPA extracts information from multiple systems, performs logical calculations, and enters the processed information into the RegTech platform. The platform, acting as an auditor, generates an audit report with various outcomes. AI then steps in as an audit reviewer to verify the report, assess risk categories, scores, and trends, and generate the final report for dissemination. Any exceptions are validated, re-processed, and re-verified.
The combination of RPA and AI creates a powerful synergy in RegTech platforms. While RPA handles the extraction, structuring, and initial processing of content, AI automatically triggers subsequent workflow steps using decision-making algorithms. This collaboration ensures tasks reach logical conclusions efficiently. The roles typically performed by humans, such as data extraction, logical processing, and report generation, can now be automated end-to-end using RPA, RegTech platforms, and AI. This leads to improved accuracy and speed, regardless of the volume of information.
There are a few niche compliance execution platforms in Indian markets that integrate RPA extensively for multiple processing and dissemination activities. These platforms can integrate with various source and destination systems, such as HRMS platforms, payroll engines, accounting ERPs, and third-party tools. RPA is embedded within these RegTech platforms, enhancing their functionality and reducing the need for human intervention.
While AI is still at a nascent stage, its potential is immense. Companies are experimenting with select modules of their platforms, aiming to deliver AI-powered functionalities for regular use by the next financial year. This gradual integration of AI promises to revolutionize compliance management, making it more efficient, accurate, and automated.
As these technologies continue to evolve, the future of compliance management looks promising, with the potential for even greater advancements and improvements.
The author is the Managing Director at Core Integra.
