Elevated interest rates, aggressive regulatory oversight, and the threat of a looming global recession ― have compounded a lending landscape already fraught with challenges. And the Federal Reserve’s series of aggressive interest rate hikes has sparked a number of repercussions.
To effectively shield against these and other risks, keep pace with everchanging regulatory measures, and maintain and demonstrate compliance amid the uncertainties of a precarious market, protecting lending asset integrity has never been more vital. And enabling asset certainty is a fundamental cornerstone of these mitigation efforts. Because asset certainty represents the obligation to pay, there must be absolute assurance of judicial admissibility, legal enforceability and regulatory compliance. Digital asset certainty provides the assurance that digital loans are compliant and meet all legal requirements and industry best practices.
Digital lending minimizes compliance risk
Today’s regulatory environment is far too complex for organizations to effectively manage compliance without the help of technology and automated processes and resources. Continued reliance on manual processes is a primary factor that is tangling compliance administration for the banking industry ― notably in tasks such as tracking and maintaining new and changing regulations, as well as collecting, analyzing and reporting on regulatory required data.
Managing compliance risk clearly remains an ongoing challenge for banks. When respondents in the 2022 Wolters Kluwer Regulatory & Risk Indicator survey were asked to identify the top obstacles to implementing an effective compliance program, they cited manual processes (54 percent) as the greatest hurdle. Even more, when queried about their ability to track and demonstrate compliance, more than half expressed concern, and nearly 60 percent reported to being unsure about their ability to maintain compliance with changing regulations and manage risk across all lines of business. And, despite tremendous strides toward automation, 87 percent of respondents are still using manual processes or spreadsheets at least some of the time for their compliance management efforts.
