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Turning the Compliance Challenge into a Business Advantage
From the Health Insurance Portability and Accountability Act (HIPAA) in the US to the Solvency II framework in the EU, new rules have spawned an army of consultants, vendors and solutions to address the "compliance" problem. But the current level of anxiety over compliance may be short-sighted. In fact, the need to achieve the higher levels of transparency required by regulators may lead to business advantage.
Complexity and transparency are adversaries–and insurance is among the most complex industries in the world. Given the siloed, line-of-business oriented structure of insurance operations and the M&A-driven complexity of systems, insurance companies do well to achieve translucence on an enterprise level, let alone transparency. But the industry's opacity is also the reason intensified compliance demands can be seen as an opportunity: they provide the impetus to break through the territorial management of business units, with the accompanying reliance on multiple reporting technologies, dependence on manual reconciliation of stacks of spreadsheets and other disparate and antiquated approaches.