Managing the intersection of compliance and technology

By Wolters Kluwer

Imagine your dream car. The one you would buy if money were no object and being practical wasn’t part of the equation. It’s fully loaded with the latest features. And, it can go 0–60 in 3.9 seconds. There’s just one catch. It doesn’t have a speedometer. So, you never know if you’re speeding—or by how much.

Getting the latest compliance technology for your organization without a solid compliance foundation works the same way. It may get you there faster than your old process, but without the right safeguards, you’re essentially driving blind.

Now imagine your car with an innovative speedometer that not only tracks your miles per hour, but also intuitively knows the speed limit for every freeway, city street, and county road in the U.S. So, you never have to guess.

When the best of compliance and technology converge, it opens the door to new efficiencies, while it closes the gap on risk.

The same is true with your organization. When you effectively manage the intersection of compliance and technology, it can transform your business. You have the horsepower you need to make your processes more efficient, plus the knowledge and internal controls to reduce your exposure to risk.

Here are just a few ways compliance and technology have intersected for some of our customers.

CRA and HMDA reporting automation
Community Reinvestment Act (CRA) compliance has become a major undertaking, consuming endless hours of staff time and management attention. The Act requires that each depository institution document its efforts in meeting the credit needs of its community, including low- and moderate-income neighborhoods. Self-assessment areas must be correctly defined. Data must be accurately geocoded. And, when the examiners come, the data must be properly organized and reported. How well you do it can impact the outcome of your exam.

The problem is that it’s hard to know how your lending performance will look to examiners. You may not even have the necessary information to demonstrate your institution’s real performance level.  

Worse yet, you may be held accountable for the accuracy and reliability of CRA data, even though the responsibility for data quality and control rests on anyone who participates in the loan fulfillment process. The same holds true for Home Mortgage Disclosure Act (HMDA) data, which is required for depository and nondepository lenders.

Our CRA and HMDA solutions allow you to proactively implement process and controls. With technology, outsourcing, consulting, or a combination of all three, organizations can build a cost-effective CRA program that matches their strategic plan, ensures lending throughout the community, and meets regulatory expectations.

Electronic disclosures
Online lending allows organizations to originate loans that are less people-intensive than face-to-face sessions with loan officers. But, it also brings challenges in compliance and profitability. Borrower rate shopping can be a problem for lenders, resulting in lower pull-through rates and increased processing costs at a time when lenders are struggling to control budgets.

Electronic disclosures accelerate the loan process and discourage rate shopping by offering immediate response in disclosure fulfillment and ensuring data security. Using our e-disclosure solution, lenders can dramatically improve pull-through rates, reduce costs per loan, and offer high scalability and security with minimal investment required.

Phone- and internet-based mortgage applications offer a great deal of potential for lenders, but have also encouraged borrowers to apply for loans with multiple financial institutions, translating into more applications than there are actual customers. Even so, financial institutions are still required to follow Real Estate Settlement Procedures Act (RESPA) guidelines that mandate disclosures to be sent to every applicant within 72 hours, regardless of the applicant’s intent. Traditional paper disclosures require considerable costs for staple items such as paper, printing, postage, and overnight delivery fees, not to mention the costs associated with the time and personnel required to assemble each document package. Administering hard copies and waiting on deliveries consumes valuable time in the lending process, leads to uncommitted borrowers, and can set back loan closings, ultimately impeding efficient loan pipeline management and running up costs.

E-disclosures eliminate the need to print and mail disclosures, expediting the creation of disclosures and delivering each disclosure to the borrower electronically. After e-disclosure notifications are sent, the system monitors the borrower’s response. If the borrower does not consent within a given amount of time selected by the lender, the system alerts the lender and automatically transitions the process from electronic delivery to paper fulfillment. The system manages each step of the operation, from printing the document to delivering the package to the U.S. Postal Service within the 72 hour RESPA-mandated time frame.

Because e-disclosure virtually eliminates the labor required by paper processes, less manpower is required to manage current production levels effectively. And, since scalability is built-in, spikes in application volume require no additional fixed costs. Lenders can forgo the costs associated with creating and delivering disclosures, saving roughly $5 to $20 per loan application.

Employee personal trade surveillance
In the securities industry, one of the chief concerns of compliance officers is monitoring the personal trading activities of employees in accordance with best practices and industry regulations.

Our personal trade surveillance software, Examiner, automates the surveillance process and enables your firm’s compliance department to effectively monitor all aspects of Code of Ethics compliance. Examiner gives compliance departments an efficient process that reduces manual procedures, increases productivity, and mitigates regulatory and reputation risks.

Comprehensive reporting capabilities allow compliance staff to view, filter, and sort all of the system’s critical historical data and present it in suitable formats for internal or auditor review. In addition, analytic reports allow users to do after-the-fact testing of the firm’s rules and look for patterns of questionable behavior.

The outcome is an efficient process that reduces manual procedures, increases productivity, and mitigates regulatory and reputation risks for the firm.

Health Savings Account administration
With the Health Savings Account market heating up, many financial organizations are looking for ways to streamline their process and reduce service expenses.

Our online administration platform allows these organizations to manage the entire process, from enrollment to payout, without a big investment up front. As a hosted solution, it minimizes their need for technology resources.

Individuals can enroll online in as little as ten minutes; then access and manage their account whenever they need to. Employers have their own access point to manage the electronic contribution schedules of their employees. Throughout the entire process, the organization facilitates customer service.

The program administrator has total control of the look and feel of the site, as well as account features such as fee schedules and interest rates.

By effectively managing every step of the process, an organization has a competitive advantage with employers and account owners. At the same time, the integrated and streamlined workflow can significantly reduce service expenses, in some cases up to 80 percent.

At the intersection, one provider
Managing the intersection of compliance and technology allows organizations to reduce costs, improve internal controls and accuracy, minimize inefficiencies, and reduce risk. Investing in technology-enabled compliance can transform your business and add vital horsepower, while protecting you from costly mistakes.

At the intersection of compliance and technology, you’ll find only one provider positioned to bring you the best of both.

About Wolters Kluwer Financial Services

More than 15,000 financial organizations trust our compliance content, technology, analytics, and services to help improve their business practices and minimize risk.
Our leading brands address a wide range of business needs in banking, indirect lending, insurance, mortgage, and securities.

One company; many trusted brands
• AppOne®
• AuthenticWeb™
• Bankers Systems
• Capital Changes
• Compliance Resource Network
• GainsKeeper®
• NILS
• PCi
• Uniform Forms™
• VMP® Mortgage Solutions

Compliance and technology by the numbers

Wolters Kluwer Financial Services bank, mortgage, and indirect lending solutions are trusted by 80 percent of U.S. banks and 96 of the top 100 lenders. We help provide more efficient ways to document accounts, move data across systems, and introduce new products to market.

Nearly 80 percent of tier-one securities and commodities firms trust us to stay current and comply with regulatory compliance. Our securities information, automated advisory tools, and software solutions guide financial organizations, investors, and even the IRS through the myriad of industry rules and regulations.

More than 85 percent of national insurance organizations and 1,200 insurers nationwide trust us for insurance compliance content. Our research tools, forms, and analysis are considered the insurance industry standard.

Contact details:
Tom Teynor, Sr. Marketing Director
T: 1-800-552-9410, E: tom.teynor@wolterskluwer.com, W: www.WoltersKluwerFS.com