Control Automation: Thriving in an evolving landscape 

This presents an opportunity for financial services to adopt emerging technologies to overcome these challenges and adapt to the current economic landscape, whilst releasing the pressure place on human resources for meticulous oversight of risk.

Identifying challenges and solutions

In a dynamic landscape, financial services organisations are grappling with an array of regulatory frameworks including the EU's Digital Operational Resilience Act (DORA), the Markets in Crypto-Assets (MiCA) framework, and – in the UK – the Financial Services and Markets Bill (FSMB), and the Consumer Duty. Complying with various frameworks contributes to the complexity of risk management and control. As teams go about navigating this landscape, they often run into similar pain points, for example evolving digital systems, a lack of technical expertise, and the integration of accurate and reliable data.

In response to this, harnessing the power of digital systems can help with automating controls and offer a systematic approach to tackle the challenges of control fatigue, the increasing pressure in regulatory scrutiny across financial services, enhanced transparency demands, and the need for real-time risk insights. By leveraging technology to enforce mechanisms and ensure seamless execution of crucial tasks, control automation provides a solution to complex pain points. Control automation streamlines processes, replaces manual tasks, and facilitates faster, more intelligent operations, ultimately providing a competitive advantage. It serves as a strategic enabler to maintain resilience and drive growth in an increasingly competitive business environment.

Mitigating challenges and driving growth

Despite the potential benefits, many face significant hurdles during the implementation of control automation. And challenges primarily revolve around three domains: people, processes, and data.

We’ve found three steps to navigate the path to successful control automation: 

Think big: Develop a comprehensive automation strategy aligned with business objectives. Identify areas and processes that can benefit from automation, prioritise projects, and set specific goals and milestones. Key areas include:

• Automating your control management framework: Having tools that can support the implementation of controls to help reduce manual errors.
• Automating your control monitoring: Investing in tools that automatically highlight control breaches, improve operational efficiency, and improve compliance culture.
• Automating your control remediation: AI-based tools can suggest remedial action when controls are breached, and even automatically implement them. 

Start small: Whilst organisations should have detailed plans to embrace control automation it is important to begin with small-scale pilot projects to test automation solutions and validate their effectiveness. Focus on areas with readily accessible, high-quality data, and established data governance practices. Partner with automation experts to ensure successful implementation. Start with controls that create more value, such as controls that are executed frequently, have low complexity, are widely used, and which are well established in operating procedures. As you prepare to scale, keep in mind that not every problem is best solved with automation. Focus on controls that either:

• Fail often and therefore have a clear remit to be fixed with automation
• Are repetitive in nature

If an area doesn’t meet either of the above criteria, it may make sense to continue with manual controls as the investment in automation may not pay itself back as quickly as desired.

Scale fast: Once the value of control automation is proven in small-scale projects, scale rapidly using a hub-and-spoke model. Implement a Centre of Excellence to standardise approaches and accelerate deployment. Monitor key performance indicators related to productivity, cost savings, error reduction, and customer satisfaction. Embrace a continuous improvement mindset to iterate on automation initiatives.

Embracing control automation is no longer a trend but a necessity for thriving in the modern business landscape. By addressing the challenges of control fatigue, transparency demands, and the need for real-time risk assessment through automation, cross-functional collaboration, and establishing clear channels of communication, organisations are positioned to secure substantial competitive advantages. Remember, with the right strategy in place – think big, start small, and grow fast, teams can navigate the transformative journey toward successful control automation.