Increasingly, companies are turning to technology solutions to track compliance tasks and prepare reports for senior management and the Board.  As powerful as these tool may be, the challenge faced by many is that internal practices vary greatly between companies and accordingly, “off-the-shelf” solutions have limitations.

This was recognized in the recent RBI Circular (RBI/2023-24/11) which calls for   comprehensive, integrated, enterprise wide and workflow-based solutions tools to enhance the effectiveness of the (compliance) function.

As companies work to meet this directive, it is important that solutions are adopted that complement and enhance existing systems rather than necessitating lengthy changes to fit the company.  This is the wrong way around!

To make technology work for you, it is essential that the chosen solution has the built-in flexibility to ensure that those existing practices that are familiar and effective are incorporated into the new tech-driven framework. This will both,  minimise disruption and preserve the culture of compliance that is the foundation of all great systems.  Here are some of the techniques to do this:

Custom Workflows. All companies have internal policies and procedures, that document how certain tasks are to be implemented. Take for example, an obligation to report misconduct. While, straightforward on its face, such obligations require that structures be put in place including;

• due diligence to ensure that the right people are asked the right questions,
• supervision to ensure that there is management oversight,
• reporting structure to ensure that the reports are coordinated,
• professional support in cases where facts may need to be interpreted,
• document retention procedures,
• feedback loops– which may lead to enhanced internal controls and training to ensure that the learnings are integrated into improved workflows.

Compliance platforms can easily take these obligations and build them into a workflow that tracks each step and provides complete transparency into execution. In addition, the scalable power of technology ensures that the workflow is equally effective whether it is confined to 5 people in a single office or touches 500 people in multiple locations and subsidiaries around the region.

Dynamic Execution. Even the most diligent workflow planning cannot anticipate every outcome, making it essential that management is free to enhance the workflow with additional steps or analysis to strengthen the system on the fly.  This “dynamic” intervention not only creates the flexibility to handle unanticipated events, but conditions the compliance ecosystem to be ready for change, thus preventing a “tick-the-box” mentality that can erode the effectiveness of workflows built around repetitive tasks.

In the example given above, the workflow requires reporting of acts of misconduct. There is clearly a mechanical aspect to this workflow in that multiple departments and people need to be contacted to confirm whether a particular fact pattern meets the threshold of misconduct.  In cases where the compliance ecosystem is seeking to prove a negative (i.e that no misconduct has occurred) the workflow has to be sufficiently rigorous to objectively demonstrate that the due diligence is credible. Managers overseeing this process need the flexibility to respond to extrinsic facts and increase the level of scrutiny. For example, if prosecution data becomes available suggesting novel avenues for misconduct, or if an audit has left unanswered questions, management’s response must be swift and credible.

Workflows must build in the capability of adding additional questions with a few clicks and the execution and reporting functions must respond immediately.  For example, if the manager overseeing the workflow wants all “potential” reports of misconduct to be reviewed by the legal department prior to a negative report, that enhanced workflow must prevent the task being closed until the “pre-condition” of legal review has been achieved.  Correspondingly, the risk-reporting function must automatically capture the additional steps and provide a time-stamped record of when each was achieved.

Parallel Execution. The compliance function requires an ecosystem of support that extends beyond compliance professionals, audit and legal, and enlists additional functions that may have only peripheral compliance responsibilities.  For obvious reasons, this is often the most difficult group to coordinate but, technology can solve this problem by enabling parallel execution.  This “peripheral” group are the least likely to be diligent in logging into a compliance reporting platform but, if they can respond and upload documents directly from their email, the problem is solved, particularly, when supported by a management escalation procedure and appropriate “recognition” for notable achievements.

Complius™ by Quant LegalTech Solves these Problems…

The Custom Workflow-feature ensures that internal processes are mapped with and integrated into the regulatory compliance dataset and managers can augment them with “Sub-Tasks” to meet emerging fact patterns. Here’s a  sequence of steps a company might adopt to address the RBI Circular referred to; above.

This is a logical workflow and with careful oversight could be effective but, remembering that RBI has been critical of the level of manual processes, this can be easily imported into a technology platform like Complius to create a Workflow, as illustrated with the initial steps shown below.

Once this is locked into the platform, technology will ensure that;

• Owners are notified
• Reminders are sent
• Proofs are uploaded and reviewed
• Misses are escalated to management and;
• Reports are Auto-Generated to monitor progress.

As the screen below demonstrates, Managers can add Sub-Tasks which can fine-tune the process and respond to extrinsic data that necessitate change.

Even with complex Workflows, everything can be reduced to sequential steps which are tracked and monitored.

In the example shown above, a company’s internal policy–Workflow-based Solution Master Plan has been uploaded along with the RBI Circular so that Task owners are left in no doubt as to what they are expected to do.  In this respect the technology not only simplifies the process but is effectively self-executing via the reminder and escalation protocol which ensures that timelines are highlighted, and laggards are called out.

What are you waiting for? Click this link for a free Demo today or write to us at amit.sengupta@quantlegaltech.com