The speed and complexity of regulatory changes in the financial sector, especially since the Global Financial Crisis in 2008 and the following slew of Anti-Money Laundering (AML) and new Know Your Customer (KYC) requirements has meant that while many financial institutions are shedding jobs on the one hand in an effort to slim down and digitize, on the other hand they are ramping up compliance professional hiring - with some increasing their compliance teams by up to three times. The supply of compliance professionals is simply not able to keep up with the demand created by the Asia-Pacific and global regulatory environment. Short of creating their own training programs to ensure a healthy supply of qualified compliance professionals (which some have opted to do, at great expense), banks must search out innovative solutions to the shortage of compliance professionals in Singapore, and the Asia-Pacific.
While acknowledging the need for greater compliance activity, financial institutions could come at this challenge from both sides by exploring and implementing Business Process and Decision management (BPM and BDM) software across their Lines of Business. Although less known in Asia and the Pacific regions, these BPM and BDM are widely used in tandem in Europe, and offer many benefits to financial institutions seeking to optimize their compliance efforts, reduce liability and risk, and use the compliance resources they have more effectively and efficiently.
Business Process Management Solutions for Banking Operations and Compliance
BPM (Business Process Management) creates visibility and transparency within business processes, making them easier to both maintain and continuously improve. BPM acts as the language of both a specific business, and business more generally by clearly and simply communicating information about how inputs are turned into valuable outputs - whether the outputs be customers onboarded compliantly, the receipt and final payment of an invoice in a P2P financial process, or any structured business process. Business processes have decision nodes along the way, which are also often the points where some form of compliance check is required or desired. The logic for navigating these decisions can be expressed in BPM’s standardized notation language BPMN 2.0, however once a certain level of business and process complexity is reached, this task becomes correspondingly more complex. Additionally compliance professionals face the challenge of not only to simply keep up with the speed and complexity of regulatory change, but also to communicate it to business users effectively.
Banking Compliance Solutions: Business Decision Management - taking control of regulatory complexity
Business Decision Management replaces the commonly used Excel spreadsheets and pages of compliance documentation many compliance professionals use with powerful rules engines, allowing compliance professionals to translate regulations directly into operational decisions for business users to utilize in their day to day work. Business Decision Management takes whole complex sections of BPM models and packages it into elegant, simple DMN models. This removes the risk of inconsistency in application, as users do not need to interpret long lists of regulations, they simply enter inputs and the correct and compliant output is generated, meaning they can complete tasks faster and more accurately.
Doing more with less: how Business Decision Management is a solution to the compliance professional shortage in Singapore, and around the APAC region
Financial and other institutions struggling to fill compliance roles as a result of low supply of potential employees (not a challenge restricted to Singapore), and high volume of regulatory change will find BDM software an attractive proposition. BDM offers businesses the means to both better manage their risk and compliance, and reduce the number of personnel (and associated costs) required to administer their systems simultaneously.
At present, most rules engines or BDM platforms operate entirely independently of any BPM system a business is using. This slows the pace of business and can result in inconsistencies between the business process, and the decision logic (the operational translation of regulations). Signavio’s BDM solution Signavio Decision Manager, is unique in that it seamlessly integrates with the BPM offering SAP Signavio Process Manager, and decision logic is executable from within the Process Editor itself. Integrated, elegant and perfectly synchronized business processes AND decisions. Combined with the process repository the Collaboration Portal, and the ability to:
- Make immediate changes to logic as required (when regulations change for example);
- Alert users of relevant logic and process changes at scale within the tool itself, to keep everyone on the same page;
- Advanced commenting functionality (social BPM) to solicit user feedback rapidly;
- The ability to quickly factor in improvement suggestions from users.
Signavio Decision Manager and Process Manger in tandem offer an exciting solution for the personnel challenges faced by banking in Singapore. BDM achieves this by creating the basis for banks to compliantly manage risk at scale and with fewer personnel, thus reducing the impact of tight compliance professional supply in the region.
7 top tips for evaluating DMN software
- Consider the risk of vendor lock-in. This can be mitigated by opting for a solution which uses an open standard notation language like BPMN 2.0 or DMN 1.1.
- Choose software which helps you get the content of your compliance efforts right. Verification of decision logic (to ensure you don’t have overlaps or haven’t missed a rule), as well as the ability to simulate before rolling out, and generate decision outputs based on inputs in real time is one of the unique features of the Signavio Decision Manager.
- Consider the interface and integration between any BPM software you are using so that does not become a limiting factor in the future.
- Ensure your chosen software solution supports traceability to ensure the operational expression of a regulation (in your business process or decision logic) can be quickly and easily traced back to the regulatory origin. This increases compliance transparency overall, but is especially useful during audits.
- Opt for a solution with built-in reporting functionality to achieve maximum speed and effectiveness.
- Verify that the solution integrates with a business rules execution environment that you can use to support Business Transformation activities, ideally by executing DMN rules in the context of a BPMN process model.
- Choose software which makes it easy to deploy changes once approved. Speeding up roll-outs and making communication with users, as well as other IT systems, simple and fast.
If you’d like to explore the idea of using Business and Decision Management software as a compliance solution in your company, we invite you to delve deeper with these resources:
Or contact us at firstname.lastname@example.org to talk to an expert.