An interesting view on the traditional position of cost of regulatory compliance versus non-compliance.
With GDPR, this dynamic is going to change quite dramatically as the potential cost of complying could go up through the roof.
Research by Pega has shown that 79% of EU consumers are unaware of their rights in the upcoming legislation. Also, when they become aware of their rights, 82% would exercise them.
If you have just 100 requests in the first month and you have (let's be kind and say) 10 systems of record such as policy and claims admin systems, you will have to create 10 pieces of work for each request, that is 1000 sub cases of work to be executed.
If you have 5m customers and 82% of them make a request, this will create 4.1m cases. That is 41m sub cases of work to be done - and completed within 1 month of the request!
Be under no illusion that with fines of up to 4% of global revenues the cost of non-compliance is massive. But the cost of remaining on the right side of the regulator is also potentially going to mount up fast.
Does your organisation have the capacity, automation and agility to do this? I suspect there is virtually no insurer currently able to meet this level of demand, let alone turn this into the revenue opportunity that it could be.
By applying AI and a "Decisioning Hub" insurers will be able to combine being risk-ready with achieving revenue readiness.
“It’s not a question of if you have a system to manage GDPR. It’s whether you have - a system to manage the systems – that you’ll need to manage GDPR.”
Thinking about making cuts to your compliance budget? Think again. With General Data Protection Regulation (GDPR) set to take effect in May 2018, regulators are waiting to make an example of any violator — to the tune of over US$20m in penalties. Now is the time to make sure your organisation is prepared to navigate the new compliance environment. Companies are more concerned than ever about non-compliance risks, and rightly so. Yet most aren’t spending enough. There’s no doubt compliance costs are rising, and companies will have to expand their compliance budgets to make room for the extra measures that new regulations demand. Compliance costs on the rise, but non-compliance still far pricier