Reducing Risk in Regulatory Change

Reducing Risk Early in Regulatory Change Projects

Within the past decade, the volume, complexity and pace of regulatory change in the financial services sector has dramatically increased. Organisations find that their standard change cycle of iterative cycles of interpretation and requirements, IT development and user acceptance testing (UAT), has become fraught with risk and uncertainty, leading to delays and/or workarounds.

Pressure to Move Quickly

The most recent regulations to emerge have greater complexity and granularity – and the pressure to implement them within a tight timeframe is high. The pressure is felt by both the business and IT. As part of the struggle to ratify change quickly, today’s financial service organisations must make critical decisions and operationalise complex and ambiguous regulations within a change process not currently suited for the challenge.

There are several areas within a typical project’s execution where delays, errors and rework may occur, such as: initial interpretation, requirement gathering and validation, rules management, and testing. The issue with the historic, standard model of implementation is that delays, as well as errors made early on, only come to light during UAT. But UAT, naturally, occurs at the end of a project.

The solutions to these problems identified late in the project are convoluted and often involve disparate areas of the business.

The Trials of User Acceptance Testing

These problems present the organisation with two choices. Either push the project back into development and try to rework and retest in time, or go ahead with the implementation, but add manual workarounds to attempt compliance, while deferring to future phases of the project. Both choices result in a massive scramble to meet the deadline under enormous stress, because there’s a real chance the organisation won’t be able to demonstrate full compliance by the final deadline.

This is why it typically takes ten times the effort to correct implementation issues found in UAT than it does to correct those issues discovered before handing the project over to IT, following the requirements stage.

De-Risk Projects ‘In Flight’ and Identify Issues Early

The obvious answer to save time, resources, costs and remove this last-minute panic is to adopt a method to interpret, document and test earlier in the process, so that when the project is handed over to IT, all the issues have been ironed out. In this case, the outcome of UAT will be much more positive and you can focus on your planned roll-out to production. Even for projects that are ‘in flight,’ this provides the ability to highlight issues ahead of UAT, in parallel with development to alleviate risk and pressure as one would move into UAT.

The Decision Model

This is exactly what Sapiens DECISION does for your regulatory change project. When your regulatory project reaches the business requirements stage, we establish an executable decision model with your SMEs to satisfy the requirements set out by the regulator.

You can also test the outcome of your decisions around requirements and establish impact early in the project. If you need to make changes, you can do so and test the effect of those changes before finalising the specification. You pass the project on to IT with a full set of verified specifications and complete confidence that the implementation will run smoothly.

This means you are much more likely to match your change schedule to your deadline. And, as a lot of the work has been done at this point, you can confidently include a high degree of automation, helping to keep costs low, both in development and as the project moves into production. It is much more likely that you will be fully compliant, reducing the risk of hefty fines and reputational damage.

DECISION-empowered change – fast, consistent and repeatable!

Share this blog post
Share Button

Steve McNickle

Stephen McNickle has been responsible for EMEA Sales and Business Development at Sapiens DECISION since 2012. An engineer by training, Mr. McNickle understands technology, and he commits to delivering value and quality. Prior to his current position, Mr. McNickle was the Vice President of Sales, Europe for cVidya Networks, where he helped the company expand throughout Europe. Mr. McNickle previously worked as a Global Network Inventory Specialist at TTI Telecom, after TTI acquired Accunet/Axarte, a network solutions company that Mr. McNickle co-founded. Mr. McNickle has a B.Sc in Electrical and Electronic Engineering from Queen’s University Belfast.

More Posts