Stop doing Compliance the old-fashioned way

The Luxembourg financial sector faces growing regulatory pressures, creating a demand for robust compliance solutions. It feels like regulatory requirements are evolving faster than one can respond to them. This is a daunting position to be in, especially without a centralized source for accessing – and making sense of – global updates.

Our financial industry has encountered a phenomenal number of regulatory updates in the recent past. Over the last three years alone, 1,200+ regulatory updates have been published at the European and Luxembourg levels. Staying current in this intricate landscape demands dedicated internal resources – a steep ask in the face of cost pressures and a shortage of risk specialists. There is therefore a need for a catch-all solution to assess and manage regulatory obligations, while maintaining a strong focus on core business objectives.

Despite the demand, a cohesive end-to-end inventory has not been forthcoming. Financial services organizations in Luxembourg have had to make do without it. As such, the collective approach to regulatory scanning, impact assessment, implementation and remediation is pretty fragmented. Firms often rely on a disparate array of services and providers, leading to inefficiencies, hiked costs, compatibility issues and increased non-compliance risks. 

To compensate for the lack of supportive tools, firms are compelled to invest more heavily in staff within control functions such as risk management, compliance, and internal audit. This too translates into higher control costs, further straining resources and diverting attention from core business activities.

Is regulatory compliance changing faster than you can respond?

If the answer is yes, you are not alone. The industry has long called for a comprehensive regulatory intelligence solution — one that efficiently tracks regulatory requirements from identification stage, impact analysis to implementation, and subsequent control and monitoring. Firms are in need of a (digital) central database or inventory that equips them with critical regulatory foresight and analytical capabilities. With this in hand, strain on internal resources can be relieved, and compliance processes automated and streamlined.

Tech-powered regulatory foresight

With regulation evolving in scope, impact and reach, EY has developed an AI-powered digital Regulatory Compliance Manager (RCM). Think of the RCM as a regulatory platform that helps users comply with thousands of laws, rules and regulations, with live horizon scanning and significant coverage of issuing authorities: EU Member States, supranational bodies and key jurisdictions globally (including the US and UK, among others).

The solution has been developed to add an extra layer of support. While some service providers stop at the identification stage (i.e., they only report on regulatory updates), the RCM draws insights from updates and translates them into tangible actions for your business. In essence, the platform offers a clear view of relevant laws and compliance impacts, maps this to your business, informs what actions to take, monitors for ongoing compliance and traces your entire compliance journey. Complemented by interpretations from subject matter experts when needed, regulatory complexities can be navigated effectively while optimizing costs. 

The European financial industry faces increasing regulatory requirements, demanding substantial resources for compliance. But, the times have changed and there is an end-to-end solution helping firms confidently tackle their regulatory obligations and remain agile, fostering a more efficient, compliant and resilient financial sector in Luxembourg.