Since the economic crash in 2008, finance specialists have been under intense pressure from regulators to ensure history does not repeat itself. With the average business in the UK being held accountable to around 80-90 regulators, employees in the finance sector are open to fines and legal action if they do not meet compliance standards.

According to the US Mortgage Bankers Association, the average cost of setting up a mortgage is $7,195 (£5,580.44). Much of this operational cost is driven by salaries for employees performing manual processes such as document review and audit, data entry, document tracking, internal and external communication and collaboration with third parties. Clearly, the business cost of compliance is clear.

>See also: How lawyers can stay compliant without losing billable hours

Top 5 compliance mistakes in finance…

By avoiding these top five compliance mistakes and addressing them with smart technologies, finance professionals can eliminate tedious proofreading, save time, and stay compliant —even in uncertain times.

#1 – Data entry mistakes as a result of reusing documents

When creating new documents, many finance experts are used to the manual process of finding and replacing and copying and pasting the latest version of the document and inputting new data where necessary. However, when you recycle previously used documents you risk leaving in outdated information and unrelated regulations.

Take notice of important details like application numbers and names as you create documents. Your clients will not be impressed by documents with someone else’s name on them, and the Financial Conduct Authority could find your business in breach of contract due to inaccurate data.

#2 – Regional discrepancies

When working globally, simple details such as date formats and time zones can cause big compliance issues if entered incorrectly. When older systems are in place such as copying and pasting a Word document, it can leave a margin for error when it comes to regional formats. Finance specialists may be working across a few regional areas with legally binding documents such as loan agreements, which can create confusion when it comes to offer length.

#3 – Overlooking typographical errors

When you’re moving fast, you might leave typos throughout your document. The key is to catch them in the editing process. If typos are missed, the court can reject the documents and require you to fix the errors, which ultimately costs more time and resources. Typos may not look like much but can directly impact legally binding documents causing loans to be rejected or take longer to process.

#4 – Outdated regulations

When a document is created manually, it can potentially include old regulations. Finance specialists have the hard task of staying up to date with new regulations, which in uncertain times like these can be notoriously difficult. To make life easier for professionals, regulations should be updated regularly in one centralised place to ensure the new bills are used going forward.

#5 – Non-standardised company-wide documentation

Having un-standardised processes could mean documents your customer receives may look different each time, as different employees may have a different understanding of the correct way to compile a contract or loan document, for example. This could mean that vital information that may be needed later is left out, causing compliance issues and creating confusion for the customer.

…and how to avoid them

But what can be done about these common mistakes when it comes to finance compliance? New steps in software could help ease the burden of compliance audits for employees.

#1 – RegTech

Regulatory technology, or RegTech, is technology used to ensure organisations manage regulatory processes correctly and efficiently. Using real-time information, RegTech uses cloud-computing technology to help organisations remain fully compliant with regulations. Functions automated by RegTech include employee surveillance; compliance data management, fraud prevention, and audit trail capabilities.

According to a survey by Intertrust, an overwhelming majority (85 per cent) of financial services professionals predict that demand for RegTech solutions will continue to grow until at least 2020 to combat ever increasing regulatory pressures as the impact of the financial crisis shows no sign of abating.

#2 – Automated document generation

Automated document generation is the use of sophisticated, controlled template technology to create error-free documentation. This increases operational efficiency in document creation, reduces risk, enhances compliance and saves resources. It ensures that information contained within business-critical documents is accurate.

Take the regional discrepancies as an example. Having this technology integrated into the software structure already in place would automatically ensure the date formats were correct for the geographical location this document was intended for. The interview-like data entry system ensures all information input is correctly described in the applicable places.

#3 – The tech solution

Finance specialists should look to technology as an aid to compliance. The less time a human spends manually creating a document and leaves it to automated processes, the less chance human error can occur when it comes to mistakes in finance compliance. These technology solutions can often be integrated into the company-wide processes and software already in place, meaning there’s no need for IT intervention and risk can be mitigated straight away. In these uncertain times, avoiding simple human error, saving time and resources, and using technology to support our workforces to meet ever-increasing compliance regulatory pressures is key to protecting our businesses and our clients.

Gary Lessels is general manager of HotDocs, a global provider of document automation

Further reading

Business Compliance – 5 things to know to ensure your business is compliant