Compliance as a service: Utilising the power of the cloud

The importance and changing nature of financial regulation requires special attention to a variety of domains: law, financial instruments and technology. Historically, technological innovation in the financial sector has developed asymmetrically by favouring outperformance and revenue generation to the detriment of ensuring regulatory obligations were complied with in a robust, demonstrable yet cost-effective way. This paper explores advancements in compliance-related technology brought on by the increased use of cloud software, data standardisation and a new application of the software as a service (SaaS) model: compliance as a service (CaaS). It includes an analysis of how utilising the network effects provided by cloud technology improves compliance outcomes. This new model of regulatory compliance lowers the risk of errors in legal interpretation, facilitates industrywide collaboration among a community of compliance professionals and brings important insights from practice to bear on often abstract legal reasoning. The unique combination of high-touch service by compliance experts and an ability to both discuss and learn from peers avoids the pitfalls of the traditional outsourcing model and naturally creates an industry standard. In this model, participants gain knowledge while reducing costs through a high level of automation and with assurance that regulatory change is integrated at speed.