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25 Most Promising Compliance Solution Providers

Regulatory Data Corp: A GRC Organization Built for the Insiders by the Insiders

The Governance Compliance Risk (GRC) industry has been in a state of evolution over the past seven years or so. Pre 2009, the focus was largely on detecting money laundering and terrorist financing; however compliance and material risk was not of high significance to regulators. But as Bob Dylan famously sang, ‘the times they are a changing’. Post 2009, we have seen a massive change in the outlook towards risk and compliance. Financial services institutions particularly are facing a rapid change in regulatory enforcements, need for better corporate governance expectations and newer and highly complex risks. Companies are expected to leave no stones unturned to make sure that they stay complainant and that their clients or vendors have stayed away from any form of wrong doings. As complicated as it may sound, there exists a solutions that is helping large Fortune 100 organizations from across the globe to tackle these challenges in a simplified and more efficient manner. Regulatory Data Corp, a diligence technology company, is one of the world’s premier Anti-Money Laundering, Know Your Customer, Anti-Bribery & Corruption solutions provider. Founded in 2002, the company integrates the industry’s largest financial crime diligence database into an agile SaaS technology platform that minimizes the number of false positives, provides accurate alerts, and protects its clients from regulatory risks.

At the helm of affairs are Thomas Obermaier, CEO and Tom Fogarty, President & COO, two industry veterans who have seen the industry evolve over two decades. Leveraging their relevant industry experience the duo has approached the challenges from a compliance insider’s viewpoint. “We realized that it was time to build a solution for a compliance officer rather than just device a tool for them. In today’s age of massive data creation it is critical to help organizations make sense of this data. Our solutions put the data in a format that is readily digested and immediate to them,” simplifies Thomas. The company combined protection and efficiency and devised solutions that are superior to other solutions offered by other players in the field. Using GRID or Global Regulatory Information Database an extensive open source risk-diligence database, RDC provides AML/KYC compliance, PEP protection, emerging market intelligence; corruption, fraud and crime protection; vendor screening and monitoring to a host of companies across the globe.

Mitigating Risk, Automating the Process

In today’s digital age, organizations are increasingly becoming porous. As a consequence financial crime, specifically cyber security related issues are becoming more commonplace than ever; it cost the global economy almost $2.1 trillion in 2015. To counter this, there has been an increased emphasis on under standing the material risks that a client might present. Thus, there is an increased pressure on compliance which has given a rise to the need for thorough information about prospective clients. Since the amount of information and data in today’s age is humungous, organizations had a tough time to wade through troves and troves of data about prospective clients. Additionally, till a couple of years ago machine learning or cognitive solutions were not yet in place. Most firms had to process the information manually which was neither efficient nor cost effective. “Organizations had to employ a large army of resources in the compliance area. They also considered the money spent on compliance as a fixed cost of running the business. Nobody was looking at making the process smarter and efficient,” adds Thomas.

Banks were tied down by two factors; one was that they were still running on legacy systems and the compliance frame work was not in place. As a consequence they just went on adding more number of people to hit the compliance milestones. RDC attacked the situation by coming up with a smart SaaS solution which could be run on a private cloud. By combining data, analytics, analysts and technology the company presented to its clients a solution that is state of the art and customizable.

“Most organizations have a three level processing system; the first stage is data aggregation and false positive remediation. The next two levels are for more serious investigation. The third stage is to determine whether or not a suspicious report needs to be filed through the appropriate regulatory agency,” explains Thomas. RDC’s solution focuses on the first step. What was earlier done manually has now been automated by adding machine learning to the mix. So in effect an organization can work more efficiently.

The Four Pillars Explained

RDC’s solution that combines the power of data, analysts, analytics and technology is designed to offer convenience, efficiency and complete peace of mind to the user. Built on the foundations of GRID, is a comprehensive risk database that combines regulatory intelligence and adverse media into a single solution. It allows for advanced alert filtering, and risk scoring, specifically based on an organization’s risk definition. The database is compiled and maintained by a network of compliance analysts armed with a deep under standing of both international politics and regulatory requirements. Its coverage includes millions of records compiled by reviewing over two billion articles and with over 20 percent of records focusing on the top 20 emerging markets.
GRID risk categories include the Global Sanctions and Watch lists, adverse media, PEPs and close associates and Iran Connect.

As in known that data is largely left underutilized unless it is analyzed well. RDC has identified this and thus helps clients categorize data by risk type and stage, and applies systematic PEP scoring. This way clients can configure screening programs to hone in on their specific risks, eliminating noise, and drive efficiency. CVIP™ Filter, RDC’s patented advanced analytics filters out false positives and irrelevant alerts based on risk type, severity, maturity and location. “PEP scores are assigned to every Politically Exposed Person record using a three-factor algorithm that takes into account position, corruption risk and adverse media. Every record receives a rating from low to ultra-high risk which you can leverage to improve alert quality,” Thomas further adds.

The company also offers a range of compliance analyst services which are aimed at eliminating the volume challenge faced by compliance offices. Clients benefit as conducting first round investigations to clear false positives and irrelevant alerts can be taken care of. The services are in accordance to client rules to carry out materiality and proximity reviews. Lastly, it helps to augment your KYC reports with relevant and critical third party data. RDC’s database, analytics and analysts are further fuelled by cutting edge technology that aids in enhancing compliance operations. Diligence into customers, transactors and third-parties is performed to your rules by RDC’s experienced analysts, while automated continuous monitoring offers piece of mind that you will be alerted to any material changes requiring your attention.

Leveraging this systematic approach the company has created various success stories across the globe. For an instance, RDC has been working with one of the top five global banks which has significant operations in Asia. The company has made RDC its sole adverse media screener for its global customer base. RDC has been successful in driving down false positives and immature alerts between 70 and 90 percent. This has consequently led to improvement of processing of high quality or high concern alerts, and has increased that by about 47 percent. “This goes to show that we can provide much higher quality and generate greater efficiency because the investigative actions are on items that are material as opposed to items that were largely irrelevant,” explains Thomas.

Staying Ever So Vigilant

Till a couple of years back, compliance was viewed as nothing more than a tick the box requirement. But of late companies have been viewing it as a means to gain competitive advantage, and are thus always on the lookout for competent solution providers who can help clients stay ahead of the compliance curve. RDC has always endeavored to stay a step ahead of the industry. The company has a dedicated group of former compliance officers and regulatory attorneys whose primary role is to keep the organization up to date on global regulations. They also work with RDC’s engineering team to put these regulatory procurements into workable compliance solutions. “Between our domain experts and engineers, we are always on top of our game,” expounds Thomas.
The company also diligently keeps its client base up to date through webinars and newsletters. “This creates a healthy communication between our customers as to material developments and also about research and development in real potential risks,” he further adds. a benefit for organizations such as RDC is that most regulatory pronouncement is out for a period of public comment. This provides them with an indication of what the needs of the industry will be. This gives the team the ability to put a solution in reasonably working manner so that when the regulation goes live, the solution is already in place. Without wasting much time, clients can avail the services and stay safe from the dangers of being non-compliant.

Gearing up for Accelerated Growth

As is evident, RDC has constantly strived to stay ahead of the needs of the industry by sensing the pulse of the future well in advance. “You’ve seen us embrace Big Data. You’ve seen us already embrace machine learning to allow our analysts and clients get better results. The next wave is going to be in terms of cognitive processing and we are poised to ride this new wave,” explains Thomas. Cognitive processing can bring forth the ability to run billions and billions of scenarios on level 1 diligence processing to have machines start to learn on their own. This way they will be in a position of handle more items automatically without a lot of human involvement.

Bycombining data, analytics, analysts and technology RDC presented to its clients a solution that is state of the art and customizable

The organization also has a bullish approach towards growth in the Asian markets. The region has been showing great strides and is developing at breakneck speed. RDC envisions that the technically forward region will be the epicenter of the growth for cognitive processing in various languages. The day is not far when machine learning and big data will become a way of life in Asia, even way before it catches on in Europe or the US. “We see a great degree of strides among our Asian clients already in that regard and look forward to spearheading this new phase of growth,” conscludes Thomas.