Buttoning down compliance using automation

The power and limits of using technology to meet regulatory requirements.

Regulatory compliance monitoring can be automated reliably up to a point. Technology has made it far easier for most credit unions to button down the compliance required around onboarding members and initiating loans, notes Marcus King, VP/audit and compliance for Credit Union Audit and Compliance Group, Birmingham, Alabama.

“The software for those activities will alert a staff person or an online program when a compliance fault occurs—and even prevent the process from continuing until it is fixed,” he explains. Most CUs have this technology, he adds.

The rewards of automation can be huge, especially around high-volume transactions. Regulations require CUs to have strong fraud detection and prevention systems. Automation tools can study patterns in members’ payments and create templates that detect “suspicious” (out-of-the-ordinary) payments and trigger alerts for people to process.

The problem, according to Amber Sutherland, SVP/sales at Silent Eight, a regulatory technology company with locations around the world, is that you get a lot of false positives that still require too much staff time to investigate. But artificial intelligence, she claims, can automatically apply more data and more sophisticated analysis to shrink dramatically the number of alerts that are really suspicious.


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