"Regulation needs to catch up with innovation" - Henry Paulson, Banker, 74th Secretary of Treasury - US.
Traditionally, banks have relied on policy, procedure and people to comply with regulations, rather than on technology - most repeatable compliance processes are mostly handled manually.
It is a known fact that regulatory pressure on banks has been increasing since 2008. BCG reports that the number of regulations that a bank has to track on a daily basis has increased from approximately 60 in 2011 to a whopping 200 in 2015. Strategic response of banks has been to handle the increasing regulatory pressure via process and people, hiring more staff for compliance. At one point, Citibank was reported to have 30,000 employees working on regulatory compliance. Despite this, European and North American Banks have collectively paid USD 321 billion in compliance fees in the period from 2008 to 2016. With increasing regulatory pressures, high costs of litigation and compliance fees, shrinking margins and shortage of compliance experts, banks are now looking at fine tuning this process in order to ensure compliance and avoid costly fees, as well as, keep running costs low.