The Key to Decision Management for Credit and Wealth Advice

My last blog post discussed the steep costs of financial compliance for Australia’s wealth and credit management compliance industry, as well as the solution to this problem: decision management.

The Benefits of Decision Management

For heavily-regulated consumer financial services and insurance companies, the benefits of implementing decision management for compliance projects are clear:

  • Reduce operational risk by 60-80 percent
  • Lower business logic management costs by 40-60 percent
  • Speed time to market by 400-1,000 percent

But What Is It?

The goal of decision management is to take increasingly complex business logic and organise it in a way that is scalable and manageable by all business units. Business logic is the underlying intent, business guidance, policies, regulations, scenarios or, at its most granular, the explicit business rules that drive a business decision or process. For instance: is this adviser authorised to give this advice for this client? Or, is the client eligible for this product?

Business logic is everywhere and managing it can be a huge bottleneck when change is required in an application or process – especially for compliance projects. With decision management, you can execute compliance projects faster and gain alignment throughout the organisation regarding the automated rules and broader business logic you are implementing.

The Key to Decision Management for Compliance Projects

The key to decision management in compliance projects is a design-based, model-driven, low- or no-code application development and implementation process. Rather than manually implementing a complex table of rules, decision management helps you organise, test and validate associated logic along the way.

The validated and tested decisions are stored and managed in one place. The same decision is utilised in multiple places to provision consistent controls across an adviser’s available tools for the provision of advice and recommendation of products. This removes redundancy and reduces the time to perform the impact analysis and implementation of a change, which dramatically lowers the cost of change for compliance advice controls. Compliance advice decisions are automatically released into the adviser’s tool arsenal, which includes:

Financial Planning

Before issuing a credit or wealth proposal, business logic can be executed against a draft SoA fact-find, credit guide (CG), and adviser and product information, to determine compliance directly against legislation.

CRM

Before offering a product to a client over the phone, a fact-find can be utilised with adviser and product information to understand eligibility for a product offering or configuration, providing up-front, proactive compliance.

Risk Management

Decisions can be utilised to determine a risk ranking for an adviser by evaluating input from multiple sources. This risk ranking is available to advisers to monitor and remediate poor rankings, avoiding the potential risk of non-compliance.

Compliance

Decisions can be utilised to determine compliance rankings, next audit dates and types of audit for an adviser (after-the-fact compliance) and to automatically determine which audit questions are required to be presented for remote auditing (desk audits).

The Importance of Proactivity and Robo-Advice

A spectrum of reactive and proactive compliance controls will be required for credit and wealth advice (as discussed above). Proactive compliance controls can be combined with decision management via robo-advice. Robo-advice is currently a hot topic within the market. Decision management puts the business in control and removes the high cost of IT involvement, with initial authoring and ongoing maintenance for robo-advice.

If you want to learn more about how you can adapt to a new world of regulatory change by adopting a decision management approach, please download Sapiens DECISION’s free white paper, Adapting to Regulatory Change: How Decision Management Presents a New Way to Look at Regulatory Change. Or check out our on-demand webinar.

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Nathan Urquhart

Nathan Urquhart

Nathan Urquhart has over 12 years of experience in the global financial services industry, specialising in decision management, business transformation and regulatory compliance. He is currently a Service Delivery Manager and Decision Management Subject Matter Expert within Sapiens DECISION where he delivers global business transformation projects. Previously, he held numerous executive and management positons within the UK including Head of Professional Services and Head of Service Delivery.

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