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March 21, 2017

Survey: Analytics Underused For Rules Compliance

George Leopold


Compliance with data governance regulations is expected to become more complex as the Trump administration rolls out regulatory changes. As data governance rules grow in complexity, however, the consulting firm KPMG warns in a new survey that data and analytics tools are not being leveraged as a way to prepare for the regulatory upheaval.

The auditing firm found in a survey of chief compliance officers released earlier this month that less than half are using big data and data analytics to conduct audits or identify trends. Just over half said improving data quality was a top compliance challenge.

Hence, the survey’s authors argue that data tools are among the most effective ways of boosting compliance with data governance and other regulations. “The pace of regulatory change is swift,” states a report accompanying the survey results. “Regulatory requirements and expectations globally are constantly changing. New technologies and analytics are becoming increasingly important.”

Nevertheless, six of ten respondents told KPMG they are unsure whether their existing technology infrastructure can be adapted to changing data compliance rules. Compliance regulations cover tasks ranging from risk assessments and monitoring to reporting and document retention.

Among the responsibilities of compliance officers is determining whether dealing with third parties can expose organizations to risks such as failing to comply with data regulations. Still, the KPMG survey found, “only about half of organizations have a compliance monitoring process to confirm their third-party vendors adhere to compliance due diligence processes.”

While the survey confirmed that more compliance officers are aware of the advantages of using data and analytics technologies to keep pace with regulatory changes, less than one-third are using data analytics “holistically to assess specific risks and trends or to refine their compliance activities based upon analytic results,” the survey found. For example, only 47 percent reported using analytics to conduct root cause or trending analyses.

As with many analytics applications, compliance officers understand the need for better data preparation, with more than half agreeing that data quality must be improved for compliance tasks such as risk data aggregation and reporting.

Meanwhile, the KPMG survey found that only 40 percent of those polled have determined whether their technology infrastructure aligns with regulatory compliance requirements or whether they are dealing effectively with compliance gaps.

The auditor and business consultant said it surveyed chief content officers from 62 U.S. corporations across seven different industries regarding their compliance frameworks.

Auditors such as KPMG are increasingly touting big data analytics as a way to assess regulatory compliance as well as identifying potential fraud. For example, consultants are leveraging analytics to audit financial statements that serve as the basis for buying or selling equities. As more data is included in these statements, auditors are promoting analytics tools as a way to ensure accuracy and avoid fraudulent claims.

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