A Guide to Compliance Reporting

What is Compliance Reporting?

Compliance reporting is something that provides a summary of a financial institution’s actions taken toward regulatory compliance with industry standards and corporate laws.

Financial institutions cannot overstress the importance of regulatory compliance and reporting. Banks and other financial institutions must comply with numerous rules governing deposits, investments, communications, and reserves. The documents that they issue to customers, specifically those related to commercial lending, must include terms and conditions as per the directives of the regulatory bodies.

Failure to maintain compliance reporting exposes financial institutions to:

• Legal hassles and penalties
• Annulment of license to operate in certain industries
• Delays in auditory clearance
• Reputational damage and loss of goodwill

Hence, financial compliance reporting must be a top priority for banks and other credit institutions.

Gaining Compliance Confidence

The ever-evolving regulations and laws create challenges for financial institutions. Firms want to avoid penalties and regulatory censure, and the best way to do that is with technologies like artificial intelligence (AI). Implementing the best compliance reporting software can ensure that firms have the right compliance culture. According to a KMPG report, 100% of financial reporting leaders in the U.S. are expected to either pilot or leverage AI for financial reporting in the next three years, as compared to 71% currently.

An AI-powered compliance reporting software can help ensure that a firm’s policies reflect the regulatory obligations, address compliance challenges, and take a more strategic approach to compliance reporting.

An AI-led Compliance Reporting Process

Creating a compliance report involves meticulous planning and preparation. The report needs to ensure that it accurately reflects the organization’s adherence to regulatory framework and commitment to operational integrity. Let’s explore how a compliance reporting software can help your organization:

Step 1: Understanding Regulatory Requirements

An AI-powered compliance reporting software can quickly identify and track the relevant regulatory requirements and standards defined by the regulatory bodies.

Step 2: Data Collection and Verification

Data collection tools like APIs and Robotic Process Automation (RPA) can automate the process and accurately gather financial records, safety reports, employee information, operational data, etc. Machine learning algorithms can validate the data accuracy and detect anomalies.

Step 3: Data Analysis and Interpretation

Analytical capabilities on the platform can help perform trend analysis, statistics analysis, risk assessment, and benchmarking. 83% of financial leaders emphasize the importance for auditors to incorporate AI into their analytical processes. A compliance reporting software can easily detect areas of non-compliance and vulnerabilities with predictive analytics.

Step 4: Report Preparation and Review

In the final compliance reporting phase, it is crucial for the organization to prioritize coherence, accuracy, and clarity to meet and exceed the expectations of the stakeholders and regulatory bodies. The report may consist of qualitative and quantitative data, action plans, and recommendations for improvement. The compliance reporting software can generate comprehensive reports and leverage collaboration tools for internal stakeholders to revise and share feedback.

To Sum Up

Embracing the best compliance reporting solution will empower organizations to navigate through the complex regulatory landscape with confidence. By automating regulatory compliance, data collection, and analysis, financial institutions can ensure seamless compliance and avoid cost penalties. Having AI-led compliance reporting software is no longer a choice but a must for organizations to remain steadfast on the path of compliance.