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  • James Wartho

Automating compliance in Banking with Fifth Logic IQ

Updated: Apr 5

Due to the Banking Royal Commission findings, the banking industry is under more pressure than ever operate in a compliant way. With interest rates going up and risks increasing, the pressure is on banks to maintain profits, increase margins, manage defaults, and satisfy regulators. The big question facing banks is how to balance these competing objectives and what role technology plays in your success.

For technology to make a difference, banks need a real time, consolidated few of their business activities and the ability to drive deeper insights and actions across whole of data.

Some of the challenges the banking industry faces in achieving their compliance and regulatory goals are:

1. The spread of data and how it’s accessed and viewed

Most banks have data spread across a myriad of systems, most of which are legacy systems that are unable to tap into unstructured data, such as voice, in any meaningful way. Obtaining a complete view across all data sources is critical to understanding your business.

Many organisations are weary of costs on new technology after big spends on giant data warehousing projects, which often deliver only a partial view of business activities, days after they occur. However, without this investment in new technology achieving a real time view of insights and activity is very difficult.

As an example, how do you correlate in real time, a hardship phone call regarding loan account information and broad statistics on how these types of hardship cases have performed in the past?

2. Increasing regulation and cost of compliance

The Banking Royal Commission marked a change in scrutiny for Australia’s banking sector. Failing to manage risk carries huge reputational, financial and personal costs for the bank’s directors.

The Holy Grail is to automate compliance giving you 100% coverage of business activities with risk and compliance personnel shifting to oversight and managing exceptions.

3. A deteriorating operating environment

Economic hardship, including a predicted 50% chance of recession, and rising interest rates are causing concerns in banks. Tighter lending standards are already being introduced and defaults are set to rise. In this environment, banks are likely to be under pressure not seen since the global financial crises.

Tight management of the business operations, real time view of risk and the ability to shift resources quickly to the areas most needed will be critical to navigating the banking environment in the years ahead.

The biggest challenge is how can you achieve this when you can’t clearly see your business activities in real time and you’re working with partial information that is a day or two old?

The benefits of using Fifth Logic iQ to overcome data challenges in the banking industry

1. Data fabrics give you a single view of all business activities

Fifth Logic iQ (FLiQ) uses data fabric technology to ingest broad data sets, in real time, to drive insights and actions based on an up-to-the second view of your activities. By using FliQ you can ingest account data, CRM data and voice data in real time. Correlate all three, and banks will gain even deeper insights.

2. Automate compliance

With an up-to-the second view of your activities, FLiQ can automate compliance in real time for the banking industry.

FLiQ uses no-code technology, allowing all employees to see and understand business operations. Risk and compliance staff can transition out of repetitive compliance tasks and instead focus their efforts on the rules that comply the business.

Artificial intelligence (AI) learns where the risks are and flags up exceptions for your risk and compliance team. With so much sensitive information in unstructured data (e.g. voice, email spreadsheets etc), FLiQ can use Natural Language Processing (NLP) to transform it into intelligible formats, critical to automating compliance.

A great example of simplifying a process through FLiQs automation can be seen in the Mortgage Advice process:

FLiQ will:

  • Drive deep insights into advisor and client conversations using AI and NLP.

  • Automate compliance across these meetings with 100% coverage and only exceptional cases being escalated to a compliance officer.

  • Increase the productivity of your advisors by automating file note creation using AI and NLP.

  • Drive real time next best conversation prompts for your advisors.

Hardship Requests

  • Monitor calls to your hardship line and use AI and business rules to assist the request and grade against previous requests.

  • Automate compliance and provide 100% coverage across your staff's performance in dealing with hardship requests.

  • Flag areas in processes where staff sentiment and anguish is high in responding to these requests.

  • Do all this in real time.

3. Speed of implementation - An impressive return on investment

Data warehouses have traditionally been the approach to combining data from many systems to create a consolidated view. These systems are often gargantuan and take many months or years to implement. Even when implemented, they are often brittle in nature and take many months to change. FLiQ uses data fabrics which dramatically speeds up implementation time, often with business value delivered in weeks not years. This dramatically reduces the cost of implementation and ongoing changes resulting in a healthy ROI for the platform.

There is no doubt the financial industry needs better, automated data collection technology. With global economic pressures ever increasing, the banking industry needs to find smart ways to stay on top of data collection and efficient business systemisation, that cuts down processing time and inefficient use of resources, in real time. Using an automated system, with real time technology will keep you on top of your compliance and regulatory requirements. Fifth Logic iQ was created with this in mind.

If you are looking to take your bank to the frontline in data processing and business efficiency, our team is ready to help. Book a spot in our accelerator program and let us help you reclaim your sleep, by breaking down data issues to restructure and improve core business processes.

*January 2024 update: Fifth Logic iQ is now FinTalkr™. Learn more about what this means by reading about it here.

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