Corlytics: A Risk-based Approach to Regulatory Compliance


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For years, financial institutions have been working with risk frameworks and technology traditionally focused on numerate financial risks in areas such as credit risk, market risk, or the balance sheet health of the institution. However, due to the banking crisis of 2008, regulators worldwide decided to supervise banks more stringently and enforce regulations more severely.

Following on from financial risk, the regulators have focused on non-financial risks, namely the operational risk of a financial institution—with the most dominant risk class being legal and regulatory risk. Incepted in 2013, Corlytics focuses on these critical areas—both current regulatory risk and emerging regulatory risk for financial firms across the globe. The company has perfected the way to numerate and quantify regulatory risk for firms.

Corlytics provides its services across all the segments of the financial services industry—global banks, asset managers, insurers, payment providers, challenger banks, and emerging fin-techs. The company is also moving into providing its services to big tech companies as they need risk management—particularly around regulation—to deal with data privacy, cybersecurity, AML, sanctions, payments, and emerging ESG regulations.

Building Transparency and Compliance

Since its inception, Corlytics understood that to build transparency and compliance in the global financial system, global regulatory intelligence needed to be categorized, risk assessed and presented in a standard manner across all three lines of defense. It automatically collects, interrogates, and analyzes all regulatory notices from regulators across the globe.

Additionally, Corlytics can risk rate the regulatory landscape using proprietary regulatory risk models. By risk rating regulations, jurisdictions, regulatory topics, business lines, products, and controls, Corlytics puts audit, risk, and compliance leaders back in control of how best to plan and invest their resource allocations. Data-driven decisions lead to better regulatory outcomes for regulatory firms, regulators, and ultimately for the consumers.

Corlytics looks at regulation as a new class of risk. The company provides a range of solutions to both regulators and global financial services firms across all regulatory classes. It tracks and manages all types of regulations including those that are future-based, and regulations updates and changes. The strategy to risk rate regulation distinguishes Corlytics from its peers. “The regulators who work with us do so because we deliver consistency and accuracy in terms of how we classify regulation (our taxonomy), which forms a core part of our IP,” says John Byrne (Founder and CEO of Corlytics).

Key Contributors to Success

The role of a leader is crucial for any organization to thrive. As the CEO of Corlytics, John is responsible for setting the company’s vision and strategy. His primary role is the strategic development of business. This includes all funding activities to ensure the company has all the required resources to grow the business as planned and to attract the best talent available—which in turn needs to be nurtured. He has been involved in the financial service sector for over 20 years. “It’s gratifying for me to see not just the growth and maturity of the sector but also how tech-enabled innovation is a key driver of change and development globally,” he asserts.

The COVID-19 outbreak has been very damaging to many sectors including: manufacturing, travel and tourism, retail, and education. However, within financial services there has been much upheaval in terms of moving more quickly than anticipated to achieve greater digital transformation, using technologies to drive this change. The marketplace is witnessing rapid growth during this pandemic. This increased demand, has provided Corlytics with some challenges including: growing the team, recruiting and onboarding in new ways and engaging with project teams in its client companies. The company is focusing on the diverse skills, wellbeing, and motivation of its employees. Stressing the importance of employees, John adds, “The key to the success of this company is our people.”

Helping Companies through the Crisis

The pandemic has heightened the awareness of risk outside of the traditional risk areas within the financial services industry. New classes of risk in the ESG domain have come to the forefront as governments and regulators are placing an added emphasis on the resilience of companies, their cyber-safety, and other important ESG issues.

Additionally, the demand for digitally available regulations that are categorized and risk ranked has exploded due to the pandemic. For instance, in 2020, over 50% of the financial regulations were amended significantly due to the pandemic. Corlytics has been helping companies track regulatory development, providing clients with information assisting them in making decisions on appropriate actions, including those brought on by events such as the pandemic.

Introducing New Solutions

Over the last year, we have seen the need to adapt our solutions to a very fluid and fast-moving marketplace,” says John. Responding to the new demands, Corlytics has developed applications to track the impact of COVID on regulations. Moreover, there were numerous developments in payment regulation, particularly affecting the larger payment providers, and the company has launched an application for that.

Corlytics is working on new solutions with firms where past and present ESG obligations have a notable impact on their business. John adds, “We help the industry and our clients make sense of the emerging regulations quickly, we make them actionable so they can put plans in place and we also help to provide a risk-based view of all emerging regulations.”

Change in Prudential Regulations

2020 not only changed the world but also regulatory priorities. Going forward—along with resilience, financial robustness of firms, and cybersecurity—regulators now want to factor in the impact of the environment into financial safety in the financial services industry. John anticipates that this will bring about a lot of change in prudential regulations—for example—banks taking risks on loan books for properties in areas vulnerable to flooding.


Read full issue: The 10 Risk Management Solutions Providers 2021

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