Sweeping regulatory changes impact companies in every industry. A modification to a records management policy, new requirements for reporting and updated security or data compliance mandates can derail daily business operations and add to IT’s ever-growing list of projects. However, companies can get ahead of regulatory change to mitigate risk in our evolving, global financial market through document intelligence.

Unstructured content is often overlooked when operational projects are prioritized or company IT strategy is planned and budgeted. Documents are rarely seen as a new, shiny object that companies are excited to invest in, so the mountains of data locked away in invoices, contracts, memos and HR files are only considered or reviewed when absolutely necessary. However, regulations for data and information management will inevitably shift, and organizations that proactively tackle document data can turn a liability into a competitive edge.

Let’s look at a few examples of changing industry standards that have the potential to impact every aspect of organizational management of documents and data.

GDPR

GDPR is a European data regulation established to protect the privacy of EU citizens. It went into effect approximately one year ago, and since that time, many companies globally have been fined for data breaches. Compliance with the policies and regulations of the mandate required comprehensive changes to business practices. Leading up to the GDPR “go live” date last May, companies around the world scrambled to refine procedures, implement data management solutions and appoint protection officers. Most organizations, especially those that didn’t specifically focus on data mining or social media data collection, had never implemented comparable levels of privacy procedures.

The result of noncompliance to the regulation is a steep fine for a company’s failure to remove or purge customer information after a direct request. Organizations with multiple document repositories and file shares might not even be aware of all the network and cloud locations where customer data exists. In this case, document data is a risk. An intelligent capture tool that provides companies with the ability to uncover hidden data and identify key values – like customer information or constituent PII – minimizes the risk of unknown data violations and offsets the burden of manual document review by employees or contractors.

LIBOR

Per Investopedia, LIBOR or the London Interbank Offered Rate “is a benchmark interest rate at which major global banks lend to one another […] for short-term loans.” Though UK-derived, this interest rate is the basis for most adjustable-rate mortgage loans in the United States. To frame this in monetary terms, roughly $1.2 trillion in outstanding mortgages are based on LIBOR, and it is being phased out of global use. The end of LIBOR is on the horizon, with a complete elimination goal of 2022.

This means all banks and financial institutions with open mortgage contracts that reference LIBOR will be affected. To address the day-forward contracts, lenders are now including language in mortgages that state the benchmark rate is subject to change. However, in existing contracts “fall back” terms will need to be enacted. The new terms will necessitate review and analysis of mortgage documentation, and with millions of mortgages impacted, the work required is intimidating.

Companies will have to choose whether to take on additional headcount to identify, read through and update client documents and payment terms or to embrace Smart Capture® technology that can automate this monumental content analysis and data extraction task.

IFRS & GAAP

IFRS or the International Financial Reporting Standard is a globally defined set of standards for accounting representation, reporting and comparison. GAAP stands for Generally Accepted Accounting Principles. In the United States, it is an accounting standard for recording and reporting information adopted by the Securities and Exchange Commission (SEC).
Each of these sets of standards is subject to change to ensure organizations maintain accounting records and report financial activity in line with modern audit expectations. As such, if a new or modified reporting requirement is announced, all companies subject to these accounting criteria would need to adapt their practices and procedures to meet the new standards.

As is the case with our GDPR and LIBOR examples, the inaccessible data that exists in unstructured documents and records sits front and center in the roadblock of process automation. For companies that have already implemented document intelligence tools, an updated standard might require a slight tweak in contract processing as opposed to a sweeping overhaul of how an accounting department tracks and manages open contracts.

Don’t let document data be the weak link in your chain of organizational information. Instead of scrambling to react to the latest data management mandate or adopt a new reporting requirement, proactively tackle unstructured content with document intelligence technology.

To learn more about Ephesoft’s approach to machine learning powered content analysis and document processing, contact us.