Since the financial crisis of 2008, the number of regulations governing the financial services industry has burgeoned and there is no sign of a slowdown. It has become increasingly challenging for firms to keep up with the regulatory burden. A wide array of government and industry bodies produce regulations. These all need to be tracked by topic, by country and over time. Firms must assess the implications of every regulation on each of their business processes at a detailed level. They must then distil them into a series of rules that their processes must satisfy, and be able to demonstrate adherence to these rules (e.g. through a series of reports to the regulatory authorities). Firms have typically taken a brute force approach to compliance by hiring large teams of staff or consultants to manually find, sift and assess all the regulatory documentation. This is fast becoming unsustainable to the extent that there are literally not enough people in the world who are experienced in compliance to advise on all the regulations being published.
JWG realised that all firms were undertaking the same labour intensive task of researching and collating the regulations on which they needed to act, and that technology could be used to lighten the load. The idea of RegDelta, a smart document management system for regulatory materials, was born.
JWG chose 67 Bricks because of their experience of building enriched content digital products in the publishing sector and their experience with cutting edge semantic technologies.
The initial focus was on creating a semantically enriched repository of regulatory materials. This repository now contains many 100s of documents, with key metadata added during the upload process. Crucially this includes the automatic classification of each paragraph within a document according to JWG’s carefully curated financial services taxonomy of around 4,000 topics.
These topics are key to enable customers to easily find and pull together all the relevant paragraphs on a particular theme for subsequent assessment and analysis (Figure 1). The client analyses the relevant paragraphs and writes a series of rules that interpret those paragraphs into the actions that the company must take to comply with them (Figure 2). Since each rule is associated with the paragraphs that reference it, this provides traceability.
A user-friendly workflow includes a configurable dashboard based on the role of the user. An organisational taxonomy forms an important component in the workflow. Configured for each client, it allows rules to be assigned for action by the relevant department or person. A business impact can also be applied: this indicates at a high level the part of the business that will be affected by a given document and is useful in management reporting.
Users can set up customised automated email alerts to stay informed about newly published or updated documents that cover particular topics, are from particular regulators or countries, or which affect given rules or paragraphs. This provides a trigger to review the business rules in a timely manner.
The user may link rules together and create a visual graph of the connections between them. This is just one of a variety of reporting tools that are available to enable managers to understand how the firm is performing in managing its compliance obligations.
RegDelta is now recognised as the world’s first regulatory change management platform and has won banking sector awards. It has transformed JWG’s business and is helping to transform change management within the financial services sector. It is used by several firms including large implementations at Royal Bank of Scotland and Deutsche Bank. In 2020 JWG partnered with PwC Italy to bring RegDelta to financial institutions operating within the Italian market. PJ Di Giammarino, CEO JWG said: “We are delighted to collaborate with PwC Italy to bring the power of RegDelta to the Italian market. We are excited to help businesses digitize processes so they can tie today’s regulatory updates directly to tomorrow’s controls in a transparent and efficient manner.”