Agile practices are becoming increasingly popular in industries where quick, adaptable solutions are necessary, but many professionals in regulatory environments remain hesitant to adopt this approach. Regulatory work is often characterised by a rigid structure, bureaucratic processes, and compliance requirements. Many a times we have seen people assume that regulatory work is fixed scope, the regulations are know up-front, the deadline is clear and there is no scope for change.

So why to use agile methods or practices?

Over the years, working within multiple different regulated industries and highly compliance driven environments, we have observed that regulatory environments are constantly evolving. They are not static or fixed as we assume them to be. Regulators are continuously responding to new discoveries and scenarios. Which makes regulatory changes quite complex and intensive.

When it comes to developing these changes as part of your technology delivery, there are 4 common challenges organisations face due to the shifting nature of regulations:

1. Monitoring Change – The ability to continuously monitor regulatory changes
2. Prioritising Change – The ability to continuously managing and prioritising the change backlog
3. Testing Change – The ability to continuously testing the new regulatory changes and regress existing changes
4. Releasing Change – The ability to continuously release regulatory changes and make it transparent to all

Working with over 20+ different organisations, our transformation experts have learnt that by applying agile practices in regulatory work, organisations can improve their ability to respond to regulatory changes, reduce costs, and increase efficiency. These benefits are not isolated to a certain type of industry or domain, rather these benefits are quite common and can be achieved with right focus and sponsorship.

It’s not that the agile practices or methods are bad or evil. It’s just how these are applied in a given context makes all the difference. You may blame agile practices but the real problem lies somewhere else.

James Taylor, Business Head, Financial Risk – Leading Bank in Singapore

Adopting Agile Practices in Regulatory Work

Agile methodology is an iterative and collaborative approach to project management that emphasizes flexibility and responsiveness. By applying agile principles to regulatory work, organizations can ensure that they are better equipped to respond to changes in regulatory requirements, improve their ability to adapt to changing market conditions, and reduce costs by eliminating redundant or inefficient processes.

For example, a recent survey by Accenture found that companies that adopt agile practices see a 63% improvement in time to market, a 60% improvement in team productivity, and a 49% reduction in development costs. These benefits are particularly relevant in regulatory environments, where speed and flexibility are crucial for ensuring compliance with rapidly evolving regulatory requirements.

Regulatory environments are ultra sensitive and require an approach that provides predictability, quality and nimbleness to adjust changes anywhere in the cycle. That’s what agility brings to the table.

Raphael D’marco – Senior Vice President, Leading Financial Institute, Sydney

Applying Agile Practices in Regulatory Work

Applying agile practices in a regulatory environment requires a different approach than traditional agile methodologies used in software development. Here are some key considerations for applying agile practices in regulatory work:

1. Establish Cross function Teams – Create cross-functional teams that included representatives from various departments, including regulatory affairs, legal, and compliance. This way they deliver end to end without hand-offs and communication gaps.
2. Apply Iterative approach – An Iterative approach can be useful in regulatory work to ensure compliance and reduce risk. Each iteration should be focused on achieving specific goals and outcomes.
3. Engage regulators & stakeholders early and often – In regulatory work, there are often many stakeholders involved, including regulators, legal, compliance, and business units. It’s important to engage all stakeholders in the agile process to ensure everyone is aligned and working towards the same goals. Most of the times, teams don’t engage with regulators until the very end. It is critical to engage with regulators early and often.
4. Invest in automating testing and regression suit – Testing is one of the critical component for regulatory work. Automated testing and having a regression suit that can validate the deliverables for each iteration is non-negotiable.
5. Keep documentation as a deliverable – Documentation is a key component of regulatory work, and it’s important to ensure that agile practices include appropriate documentation to meet regulatory requirements.

It is common to hear complaints from leaders around the testing spill over, not enough time to test and repetitive testing during iterations etc. With proper application of agile practices and commitment from leadership, these complaints and challenges can be resolved in a collaborative manner.

Case Study: Agile Implementation in a Financial Institution

A large financial institution was struggling to keep up with the pace of regulatory change and was facing mounting costs associated with compliance. The organization was experiencing delays in implementing new regulations, and its compliance team was struggling to keep up with the pace of change.

To address these challenges, the organization decided to adopt agile practices in its compliance function. The first step was to establish cross-functional teams that could work collaboratively to develop new compliance solutions. These teams were made up of individuals with diverse backgrounds and skill sets, including compliance professionals, IT experts, and business analysts.

The teams used an iterative approach to develop new compliance solutions, with each iteration focusing on a specific set of requirements. The teams worked closely with regulators to ensure that the solutions met all necessary regulatory requirements.

As a result of the agile implementation, the organization was able to significantly reduce the time and cost associated with compliance. The organization’s compliance team was better equipped to respond to changes in regulatory requirements, and the organization was able to implement new regulations more quickly and efficiently.

Key Benefits of Agile Implementation in Regulatory Work

There are several key benefits of adopting agile practices in regulatory work:

1. Improved Response Time: By using an iterative approach to develop new solutions, organizations can respond more quickly to changes in regulatory requirements. Agile practices allow for faster turnaround times in regulatory work, which can be crucial in industries such as healthcare and finance where regulations can change quickly.
2. Increased Efficiency: Agile methodologies eliminate redundant processes and encourage collaboration, which leads to increased efficiency and lower costs.
3. Enhanced Transparency: Agile practices provide greater visibility into the regulatory process, allowing stakeholders to track progress and identify potential issues early on.
4. Better Quality: Agile methodologies emphasize collaboration and communication, which can lead to better quality solutions that meet the needs of both regulators and the organization. Agile practices emphasize continuous testing and feedback, which can improve the quality of regulatory work and reduce errors.

Conclusion

In today’s rapidly changing regulatory environment, organizations that adopt agile practices are better equipped to respond to changes in regulatory requirements, reduce costs, and increase efficiency. By establishing cross-functional teams and using an iterative approach to develop new solutions, organizations can improve their ability to respond to regulatory change and ensure that they are compliant with all necessary requirements. As the case study above illustrates, the benefits of agile implementation in regulatory work are significant and can have a profound impact on an organization’s ability to meet its compliance obligations.

At MASSIVUE, our approach is to partner with our clients and deliver trusted solutions. Our extensive experience in transformation and implementing agile practices / methods in regulated industry can help you achieve better business outcomes. Whether you’re just getting started or want to refresh, restart your agility journey, we’re here to help.

Please contact our experts for a non-obligatory discussion here.