How Regulatory Compliance Technology (RegTech) Is Impacting The Legal Industry
Compliance is becoming more and more complex, leading several industries to utilize regulatory compliance technology or RegTech solutions, as they’re also called. It helps financial firms, for example, become more effective and efficient and minimize regulatory risk and overall complaint costs. But how RegTech impacts the legal industry, and why should financial service law firms and lawyers know about it?
What Is RegTech?
RegTech Compliance is a practice of utilizing software processes to improve regulatory management. Although relatively young and new, technology regulatory compliance is maturing expeditiously. RegTech businesses are engaging natural language (NL) processing, machine learning, AI, blockchain, and other techs to bring the powerful digital revolution to the regulatory compliance world.
RegTech became a reality when various companies collaborated and realized that tech could simplify regulatory procedures. It uses “Software-as-a-Service (SaaS)” – big data, artificial intelligence, and cloud computing – to handle regulatory compliance. It also minimizes the stress by streamlining the process. Money laundering, security breaches, and cyber-attacks are common; RegTech compliance helps businesses minimize these and other threats. Though it’s primarily used in financial applications and sectors, more and more industries are using and reaping the benefits.
How RegTech Is Impacting The Legal Industry
Believe it or not, lawyers play major roles in regulatory ecosystems. They, for example, collaborate with a regulator to help form rules and counsel clientele on the application and development of those rules. The cross-collaboration among regulators, firms, their workers, and a law firm is crucial to building regulatory compliance and maintaining competitive markets.
Besides counseling clients on various RegTech compliance products, a lawyer should understand how it impacts the legal industry. Over the last decade, RegTech has underlined its influence over the wide legal and regulatory landscape. Without further ado, here’s how RegTech impacts the legal sector:
1. Due-Diligence in Private Equity, Merger & Acquisitions, and Venture
Instead of law firms manually reviewing and requesting big datasets every few months regarding venture investments, mergers & acquisitions, and equity deals, they could leverage RegTech to request information, study the initial reaction, and execute the initial analysis.
2. Document Review
RegTech can review various materials in real-time as they upload in the data room. Moreover, the tech could also produce weekly or daily status reports with preliminary assessments.
3. Contract Creation & Review
Considering the latest advances in NLP, lawyers or law firms can utilize NLP products to form and review contracts, particularly standardized contracts like real estate. Even though lawyers will still craft personalized contractual terms, the standard (boilerplate) provisions, structure and formatting will largely be operated by techs.
What Lawyers Should Know: Best Practices for Your Law Firm
Here are a few things lawyers and law firms should know about regulatory compliance technology or RegTech:
Cost Saving
Many businesses rely on manual procedures for regulatory compliance, even today. RegTech helps companies save adequate money by assisting them in improving their existing compliance processes. Essentially, companies can effectively collect, analyze and manage regulatory data, requiring less labor and time.
Risk Reduction
Regulatory compliance is dependent on a risk manager to keep abreast of regulatory changes.
However, various RegTech companies are ready to help them by providing targeted, real-time alerts about compliance, regulatory, and legal issues. In addition to that, regulatory compliance technology solutions can automate and streamline risk-management procedures.
How Computer Resources of America (CRA) Can Help
All organizations need to abide by the rules and regulations. However, regulatory compliance could be complex, time-consuming, and tedious. Luckily, RegTech can help ease the entire process. Computer Resource of America (CRA) can help businesses remain ahead of their competitors and offer quality IT and RegTech assistance.
CRA provides additional IT assistance and related support to the legal industry. For more information, visit our website or contact us directly!