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More Regulation Means More Compliance Tech

EY survey finds chief compliance officers using tech at a high rate, and are building solutions themselves.

Regulatory changes are a fact of life in the insurance business, and compliance departments within carriers are mature users of technology. That's according to a EY survey of 16 insurers that found 88% using tech for "basic functions, such as tracking new and amended laws and tracking action plans."

However, what's missing is an "advanced, integrated technology solution designed to meet [compliance]-specific needs, although some of the CCOs are in the process of building such a solution," the company wrote. Thomas Ward, EY partner, says that the main consideration for technology is how well it integrates across the enterprise to get relevant data.

"There's more and more reporting that is coming up through the CCO," Ward says. "We think the use of technology will evolve with it and improve the overall integration with the risk practices and the audit practices."

Today, a lot of the technology built for reporting is done on an ad-hoc basis, Ward adds. That's because compliance departments want to make sure the tech they use is right for the job, not just shoehorn in something off-the-shelf.

"This is an area where it's pretty consistent, and you look at some of what the CCOs were saying for the future, they're very much embracing the use of tech," he says. "But they want to make sure they really understand how it can help them."

Nathan Golia is senior editor of Insurance & Technology. He joined the publication in 2010 as associate editor and covers all aspects of the nexus between insurance and information technology, including mobility, distribution, core systems, customer interaction, and risk ... View Full Bio

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KBurger
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KBurger,
User Rank: Author
5/1/2014 | 2:46:18 PM
re: More Regulation Means More Compliance Tech
I don't think there ever could be an "everything you need for compliance" solution, whether for banking and especially for insurance, given the complexity of the industry and different lines of business. That said, tech companies have never been afraid of developing and marketing point solutions to financial institutions, and I still find it surprising this hasn't happened to a greater extent (according to the EY research).
Jonathan_Camhi
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Jonathan_Camhi,
User Rank: Author
5/1/2014 | 2:31:21 AM
re: More Regulation Means More Compliance Tech
Yes it's typically one of the most complex parts of the organization with so many areas of compliance and so many corresponding systems. Unfortunately nobody's come up with an "everything you need for compliance" solution, although if someone did, they'd make a lot of green.
Nathan Golia
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Nathan Golia,
User Rank: Apprentice
4/30/2014 | 10:21:18 PM
re: More Regulation Means More Compliance Tech
Right. Well, it's not that insurers aren't using tech for compliance Gă÷ it's that there aren't off-the-shelf solutions that are suitable. SO there's a lot more build in this part of the enterprise than places like claims or policy or billing.
KBurger
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KBurger,
User Rank: Author
4/30/2014 | 7:46:24 PM
re: More Regulation Means More Compliance Tech
I'm a bit surprised to read about this lag, considering that insurance probably is the most highly regulated industry (except maybe nuclear), and always has been. So you would think that compliance would have been an early target for automation and other enabling technolgies. But even 5+ years out from the financial crisis, 10 years or so post-Sarbanes Oxley and almost 20 post-GLB, it appears there is a long ways to go before we have truly tech-enabled compliance operations.
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