The Role of Decision Management in Financial Compliance

James Taylor, CEO of Decision Management Solutions, and I co-presented a webinar earlier this month to discuss the application of business rules and business decisions in implementing financial compliance solutions.

We agreed that regulatory compliance (e.g., Basel III, FED 5G, FATCA) is a problem well suited to a Business Rules approach. Primarily because:

  • it is repeatable and tractable to automation
  • it demands transparency and traceability (regulations need to be followed and be seen to be followed) which implies the rules need to be expressed in business English
  • regulations change frequently and typically mandate a ‘short time to market’
  • it requires a degree of rigor to cope with the complexity of regulation
  • it stipulates many regional variations in business logic which need to be coordinated

However, we identified five key issues for financial compliance and discussed why business rules alone do not fully address these challenges. In summary, we feel that Business Rules alone does not resolve:

  • how business metrics can be used to monitor the effectiveness of compliance rules
  • ‘big picture’ impact analysis to a compliance rule set when regulations or underlying financial conditions change
  • the need to consistently apply a compliance policy throughout a complex business process
  • the ability to precisely define rule semantics and align them to compliance policies
  • the ability to scale a rule set while maintaining coherence

Decision management can address these issues and the webinar illustrates this with a demo of a compliance decision model using DecisionsFirst Modeler. Please see the recording of the webinar at http://decisionmanagementsolutions.com/agile-and-cost-effective-financial-compliance

If anyone is using decision management (or just business rules) for financial compliance I would be most interested in your views.