As the financial services industry evolves, so do the solutions available to banks, credit unions, mortgage companies, and fintechs. In this blog, learn about knowledge as a service (KaaS) and what it looks like for financial institutions.
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Knowledge as a Service (KaaS) combines technology and talent to deliver knowledge, information, and expertise through a cloud-based platform or software solution. It can include anything from databases, research, and model content to professional expertise and analysis.
The goal of KaaS is to provide financial institutions efficient, cost-effective access to top-tier expertise so that the board, management, and employees can leverage knowledge they need to work efficiently and make informed decisions without investing in more people and infrastructure.
Software as a Service (SaaS) is a model where a solution provider hosts its applications on the cloud, enabling customers to use the platform anywhere they have an internet connection without downloading software. SaaS solutions can be anything from email and calendar applications to customer relationship management, project management, and fintech tools to streaming services.
The difference between KaaS and SaaS comes down to what’s inside the solution and around the solution. While a SaaS solution often makes your institution more efficient, whether through streamlining processes or aiding an activity your institution can’t do on its own, a KaaS solution improves on that efficiency by adding knowledge to the mix so that your institution is smarter — savings hours and hours of research and analysis for faster, more insightful decision making. It’s constantly adding new information and is supported by experts.
KaaS solutions cover many industries, but one area where they really lighten the workload while improving business intelligence is the financial services industry.
Fintechs, including risk management technology (risktech) and compliance management (regtech) companies, have begun offering solutions that do more than automate risk and compliance functions. Staffed by risk and compliance management experts, they break down complex concepts and translate regulatory jargon into easily digestible information so that financial institutions and the companies that partner with them can better understand their risk exposure and more informed decisions, more quickly.
Areas of risk management and compliance that get the most benefit from KaaS include:
Regulatory change. Basic regtech can help a financial institution log what it’s doing to implement new regulations, but it doesn’t tell you what changes were made, if the changes impact your institution, and offer a suggested implementation plan. That still takes hours upon hours of careful research and reading.
At Ncontracts, KaaS means that our in-house regulatory attorneys and certified compliance officers update Ncomply, our compliance management solution, daily — doing all that reading and research so your institution can focus on what needs to be done. They also take page after page of dense regulatory language and condense it into plain English summaries so it’s easy to understand what’s expected. Implementation guides give your institution a head start in deciding what to do next and a path forward.
Risk assessments. Risk management technology solutions do a great job promoting consistency by ensuring the entire institution is using the same scale to measure risk. They make it possible to assign risk assessments to staff and view risk in real time.
But before you can conduct a risk assessment, you must identify the potential risks. You need to know what questions to ask and which areas to evaluate. A KaaS solution like Nrisk lightens that load with model risk assessments drafted by experts to point you in the right direction. For example, Nrisk is home to nearly 40 model risk assessments including loan writing & servicing, BSA/AML/OFAC, and IT governance. The solution’s implementation team includes former bank and credit union chief risk officers who know how to set up a risk management program at an institution like yours.
New product, service, and market launches. Launching a new product, service or market requires a lot of research. That includes digging into every state and federal law and regulation that apply to those products and services or that market.
Ncomply is one KaaS solution that helps get to market faster. For example, its RequirementsBuilder feature leverages the research of Ncontracts’ compliance pros, making it possible to select a product and find out all applicable banking regulations in seconds instead of days.
Vendor due diligence. Effective vendor management requires tremendous amounts of due diligence. A technology solution can give you a place to store all those documents and remind you when to gather updated documents — but it can’t help you with the real heavy lift: collecting, reading, and analyzing what really matters in page after page of test results, financial reports, SOC 2s, and other documents.
A KaaS solution like Nvendor complements helpful software with expert vendor services. For instance, Ncontracts has a team of experts to gather due diligence documents, carefully read through the technical jargon, and then summarize the key points so that you have the information you need to risk assess your vendors. It also mines publicly available data for its Vendor Cybermonitoring feature, which sends out alerts when selected vendors are having a cybersecurity issue
Fair lending. A fair lending solution can do a perfectly fine job analyzing data, but a KaaS solution takes those analytics to the next level by explaining what they mean—and what actions your institution should take based on those findings.
At Ncontracts, KaaS means sophisticated data analysis paired with regular meetings with our Fair Lending analysts to help you understand what’s really going on with your fair lending program and what, if anything, you should be doing to adjust it. Data doesn’t mean anything without context.
Nfairlending clients get access to an Ncontracts Fair Lending or CRA Analyst who walk them through the software, discuss focal points, and provide coaching/guidance. Our expert team has access to a wide variety of data sites, giving clients insights that go beyond their own data for a uniquely comprehensive perspective.
Read also: Can ChatGPT Help Your Compliance Department? Not Yet.
These are just a few examples of Knowledge as a Service (KaaS) solutions in risk management and compliance. In each case, the solutions help financial institutions better understand risk, eliminate time-consuming tasks, and benefit from a huge bench of industry-specific talent without having to invest heavily in staffing or infrastructure.
Financial institutions that embrace KaaS solutions for risk and compliance management elevate their risk and compliance posture — and they do it quicker and more efficiently. From identifying regulatory change to knowing which controls to measure and monitor to getting an alert when a critical vendor is experiencing a cybersecurity issue, KaaS solutions help mitigate risks to reduce the likelihood of failing to meet business objectives, violating consumer protection laws, getting burned by a subpar vendor, or failing to recognize and remediate inadequate controls. These problems can end up costing a fortune.
On the flip side, not having to rely on heavily on expensive in-house talent and moving to market faster add to the bottom line. It’s much more cost effective to invest in KaaS solutions backed by experts than to go it alone.
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