Brands are utilizing voice technology to help compliance teams reduce false positive alerts and significantly lower compliance costs.
The challenges and risks of manual compliance monitoring
Compliance has become a significant and growing challenge for organizations due to the volume of customer interactions each day. With contact centers processing thousands of calls a day and trading floors facilitating a similar number of deals, individuals tasked with compliance monitoring can soon become overwhelmed, leading to human error.
Companies face significant penalties for failing to conform to legislation covering issues such as protecting customer data, guarding against money laundering and the most recent fines surrounding spoofing (involving placing bogus orders to create the illusion of substantial supply or demand, which moves prices). There is huge pressure to ensure the rules are followed and activities can be tracked to prove compliance in the event of an audit.
One of the most challenging data types to extract useful information remains audio recordings – often requiring large teams of people to manually listen to calls. Tools to automate the process have proven successful subject to that all-important transcription achieving a decent level of accuracy. The rise of false positive alerts further exacerbates the issue and unnecessarily increases costs. Is the lexicon-based approach now superseded by the event-driven analytics?
The rising cost of ensuring regulatory compliance
Top-tier banks in the US are spending more than $1 billion a year on compliance – and, in some cases, it accounts for more than 10% of a bank’s operating costs. For European banks, the average cost of compliance is estimated at 4% of total revenue – but is expected to rise to 10% by 2022.
An Accenture survey has predicted an 89% increase in compliance investment over the next two years. And it is expected that the operational regulatory burden facing financial institutions will double every few years.
Automation with voice technology saves time and money
Historically, organizations were required to make a significant investment in people to manually monitor customer interactions to remain compliant. Staffing costs represented one of the largest costs to financial institutions and compliance monitoring was a daunting job.
Organizations now face a challenge to balance the cost of a large compliance team with the risk of exposure to compliance breaches. They are turning to best-in-class speech recognition technology to empower compliance teams to process calls rapidly and in real-time.
How to reduce false positive alerts using RegTech
Voice technology – and other regulatory technology (RegTech) solutions – enable companies to make customer interactions visible at scale within their organizations. Stored recordings can be located and replayed automatically in the event of a query from regulators or customers.
Using automated tools also reduces human error and false positives or negatives – limiting the number of alerts and in turn, the number of deeper reviews required. Voice technology automates the heavy lifting of transcribing calls while reducing the workload of compliance teams – making them more effective. With the volume and velocity of data requiring monitoring increasing exponentially, automation is the only option to avoid operational costs soaring with the need for larger compliance teams.
Conclusion: Automation is a must to keep up with the evolving world of compliance
Monitoring customer and employee interactions for compliance breaches is a costly and time-consuming process. Staff carrying out the task can become overwhelmed and make mistakes – falsely reporting something as a compliance breach or missing a genuine breach of the regulations.
Automation using RegTech reduces these false positive alerts – saving time wasted re-reviewing interactions and helping organizations remain compliant.
Download our Smart Guide