The whole world is looking at sustainability not just as a beautiful concept, but as the only effective way to build the future of the planet. Just think of the recently held COP26 (26th United Nations Climate Change Conference of the Parties). This is why the Environmental, Social and Governance (ESG) issues are increasingly at the core of the politics and financial debate. So much at the core to become, on one hand, the basis for principles which governments and companies need to be compliant with, while, on the other hand, the engine of some financial products in the form of funds and investments. All these elements are expressed with the acronym ESG (Environmental, Social and Governance) and affect many aspects of our society, especially the banking world. ESG risks and reporting are becoming increasingly sensible issues for financial institutions. And our AI RegTech platform, Daitomic, answers to this new need, by optimizing the compliance management processes.
The ESG Principles for Responsible Investment (PRI) have recently become a real key word in the financial sector, but not many compliance professionals know how to move in this new maze. Surely there are some regulatory documents by the European Union to refer to with regards to ESG, including the EU Regulation 2019/2088 (SFDR), the EU Regulation 2020/852 and the more recent Proposal for a Regulation on European Green Bonds, but the situation is still far to be clear and defined. Also considering the general context of finance together with the current debate on machine readable regulations and new technological tools needed to help both regulators and financial institutions cooperate effectively. The terms sustainable finance and EU Green deal risk to remain just agreeable concepts without adequate guidance from the authorities, such as the European Commission, but also without appropriate technological solutions to manage this complex scenario. Focusing on the Product Governance point of view, companies need help to create sustainable financial credit products, with the appropriate safety required also to produce ESG certifications, and also to properly carry out marketing activities. Turning to Risk Management, financial institutions cannot handle it without a digital and real-time access to banking regulations. Well, Daitomic has been created exactly to offer financial compliance professionals these possibilities, thus allowing them to make right decisions, based on precise information obtained in a reasonable time.
Our deep analysis on financial compliance workflows, and the related critical points, gave as outcome an evident indication about what financial institutions currently need the most, namely digital, interactive and personalized legal inventories. Our banking partners and advisors clearly demonstrate to us that all the operations related to the collection and analysis of regulatory updates is currently inaccurate, difficult and highly time-consuming. Starting from this fact we’ve created the legal inventory feature of Daitomic.
This functionality allows users to create their customized legal inventories, also making advanced search among the needed legal sources and experiencing an intelligent navigation within the regulatory perimeter visualized within the platform.
Within this perimeter, the laws of interest can be consulted in an interactive mode and also compared, when they are enacted in different versions. Hence Daitomic’s users can easily browse among regulations and quickly compare the different versions of the searched law and its specific parts. But that’s not all, as Daitomic includes also the automatic regulatory obligations extraction feature.
Thanks to its machine readable version of laws, the platform reads banking regulations in place of humans, also taking into account the internal processes and policies impacted by the documents itself, and extracts the related obligations. By using Daitomic, financial compliance professionals receive only the ESG-related information they need to make decisions, namely the basis for a Gap Analysis and the following evaluation of the ESG impact on business. These features are already available and testable for free on Daitomic: !