Selecting the Right Solutions
One of my pet peeves is when solution vendors throw around fancy buzzwords, claiming to magically reduce false alerts. It sounds great but the reality is, it is on us to evaluate what we need before diving in to buy the latest RegTech solution and blame vendors for ‘overpromising’.
It is easy to get overwhelmed by a flood of alerts, whether from name screening, transaction monitoring, or fraud detection, and tempting to just close our eyes and contemplate replacing our current systems.
In today’s complex financial landscape, we often get caught up in finding the most sophisticated tools. Far too often, we get lured in by the latest “shiny object” without truly understanding our own needs. All too soon, we realise that these tools do not deliver the value we hoped for, causing endless headaches with wasted resources on tools that do not quite fit or not scale well.
But the issue often is not the tool itself. It is in how we are using it and how our data flows are set up.
Simply put, a more sophisticated tool does not always mean a better one. Implementing complex solutions without first understanding our pain points and business needs is a recipe for failure.
Start with a Clear Understanding
Before jumping into buy, build or enhance, we need to start with a few key questions:
- What regulatory requirements are we addressing?
- What pain points are we trying to solve?
- Where are the inefficiencies and bottlenecks in our current setup?
- What are our long-term goals for compliance and operational efficiency?
- Can our existing tools be upgraded or integrated to meet future needs?
Next,
Evaluate Our Current Capabilities
Often, organisations rush to buy new technology, only to realise that their existing systems, with a bit of tweaking, could have met their needs all along. So, before spending more, let us take a closer look at what we already have.
Are we underutilising our current tools? Can they be enhanced or adapted to address our issues? Sometimes, better integration or additional user training can unlock the full potential of existing systems.
Evaluating a New Purchase
If we do decide to explore new tools, here are some questions to consider:
- Will new tools seamlessly integrate with our current setup, or will they require major adjustments?
- How do we migrate legacy data? Are the structures compatible?
- Do we need to redesign internal processes to accommodate the new system?
- How much training will our team require?
- Can the tool handle future growth, including increased data volumes and changing regulations?
Test, Then Decide
Testing the solution through a pilot or ‘sandbox’ environment before committing fully helps determine if they truly meets our needs in real-world scenarios and solve our challenges before we commit. It also gives us a chance to evaluate vendor support and see if the tool leads to noticeable improvements in compliance efficiency and risk mitigation.
At the end of the day, selecting the right RegTech solution is not about chasing after the most advanced technology. It’s about finding what works best for our business needs, ensuring it integrates smoothly, and selecting something that can grow with us.
I hope this reflection helps you make more informed decisions and avoid some common pitfalls when selecting RegTech solutions.
Author: Julia Chin