Fortent, a provider of information and technology to the risk and compliance market, has developed a new tool for quantifying the cost impact of regulatory information management.
Available free to users who register on the Fortent Inform web site, the “Fortent Inform Efficiency Calculator” helps financial institutions determine the real cost of their compliance functions including the often “invisible costs” that weigh down compliance budgets.
Tracking key variables such as staff salaries and time spent gathering and interpreting banking regulations, the calculator can provide a more concrete picture of the actual resources consumed by these activities.
Large banks can spend more than $100 million each year on compliance with federal and state regulations. A 2007 Tower Group industry study found that “people-related” costs account for, on average, nearly two-thirds of a bank’s regulatory compliance expenses.
Fortent’s research has revealed that roughly one-third of this cost is earmarked for accumulating and disseminating the latest regulatory information and advising employees of the impact.
Last year Fortent launched Fortent Inform, a web-based tool for financial institutions that provides a centralised source of compliance information and analysis. Reducing the time and money spent on gathering, distributing, and tracking regulatory information, Fortent Inform allows firms to lower their overall compliance budgets and staff expenses.
“Using the Efficiency Calculator allows banks to translate the enormous number of hours staying up-to-date on regulations into a real cost figure. When they realise what this figure is, it really makes sense to them to find a better way of managing all of this information,” says Ian Rosen, product manager for Information and Training, Fortent.