The Role of Business Rules in Regulatory Compliance: How Progress Corticon.js Can Help

See how Progress Corticon.js can help your business with regulatory compliance by automating the decision-making process.

Businesses today face a multitude of challenges when it comes to regulatory compliance. The landscape which keeps evolving has made it increasingly difficult for companies to respond quickly to the latest regulations and maintain business agility while adhering to compliance standards.

For example, healthcare organizations must comply with HIPAA regulations, while financial institutions must comply with regulations such as Basel III and Dodd-Frank. Non-compliance can result in severe consequences, including financial penalties, loss of customer and investor confidence, and even prosecution.

To address these challenges, businesses can turn to business rules management systems (BRMS). By automating the underlying decision-making process within their business applications, organizations can quickly and easily adapt to changes that can affect compliance. This blog post shows how BRMS such as Progress Corticon.js can help organizations manage business rules and ensure compliance.

The Risks of Non-Compliance

As of 2020, stats indicate that non-compliance costs businesses on average $4,005,116 in revenue losses. Businesses that pay little attention to compliance face fines from regulations such as the General Data Protection Regulation (GDPR). Severe violations against GDPR can result in a fine of up to 20 million euros or 4% of the undertaking’s total global turnover from the preceding fiscal year, while less severe violations attract 10 million euros or 2% of the undertaking’s entire global turnover from the preceding fiscal year.

But that’s not all. Non-compliance not only leads to fines, but can also result in legal action, reputational damage and loss of customer trust. Regulatory authorities may require companies to halt operations until they can demonstrate compliance. This can even hamper employees’ productivity and satisfaction ultimately affecting the company’s bottom line.

Some of the most prominent federal regulations include:

• The Sarbanes-Oxley Act of 2002, which regulates financial reporting and corporate governance
• The U.S. Health Insurance Portability and Accountability Act of 1996 (HIPAA), which regulates the handling of protected health information (PHI)
• The European Union’s General Data Protection Regulation of 2016 (GDPR), which regulates the handling of personal data of EU citizens
• The Payment Card Industry Data Security Standard (PCI DSS), which regulates the handling of credit card information
• The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which regulates financial institutions to prevent another financial crisis
• The Federal Trade Commission (FTC), which regulates advertising, marketing, and consumer protection
• The Environmental Protection Agency (EPA), which regulates environmental standards and pollution control

These are just a few examples of the many regulations that businesses must comply with to operate legally and ethically. Companies that are compliant with regulations can gain a competitive advantage by demonstrating their commitment to ethical and responsible business practices.

How Important are Business Rules in Compliance?

Business rules are a set of guidelines that define how an organization operates. They provide a framework for compliance by defining the actions that should be taken in specific situations. They help to ensure that decisions are consistent, transparent and based on objective criteria. For example, a business rule might specify that all customer data must be encrypted when stored or transmitted to comply with data privacy regulations.

Business rules can be applied to various compliance areas, including data privacy, financial reporting, environmental regulations, and health and safety.

Challenges of Compliance and Using a BRE to Automate Compliance

Businesses struggle to keep up with changing regulations and laws. Keeping up with complex regulations and laws, ensuring employee compliance, allocating sufficient resources, and managing third-party compliance are all significant challenges that businesses must overcome to remain compliant.

Using a Business Rules Engine (BRE) allows you to maintain compliance in an optimal manner. One of the most significant advantages is the ability to implement rule changes in minutes, not months. This is because a BRE allows for the creation and management of rules in a centralized location, which can be quickly modified and deployed without the need for extensive coding or IT involvement. This streamlined process saves time and resources while ensuring that businesses remain compliant with regulations.

Another benefit of using a BRE is that it lowers the risk of errors through built-in testing and audit trails. A BRE can be configured to test rules before they are deployed, ensuring that they will function correctly and not negatively impact other areas of the business. Additionally, audit trails can be used to track changes made to rules and identify any issues that may arise.

How Progress Corticon.js Can Help

Progress Corticon.js, a business rules management system, can help businesses address challenges of regulatory compliance with business rules in several ways:

Automating Complex Decision-Making Processes

Corticon.js allows businesses to automate complex decision-making processes, reducing development and change cycles by up to 90%. This can help businesses to make decisions faster and more accurately, while also reducing the risk of errors and inconsistencies. Corticon uses a graphical interface to allow users to create and manage business rules, which can be easily integrated with existing systems and applications. This means that businesses can quickly and easily implement changes to their decision-making processes, without the need for extensive coding or development work.

Codeless Authoring of Complex Rules

With Corticon.js, businesses can author complex rules without limits. The system allows domain experts to create and manage business rules using natural language, which can be easily understood by non-technical users. Corticon.js empowers business users to create and modify business rules without IT involvement. This means that businesses can involve more people in the decision-making process, without the need for extensive training or technical expertise.

Ensuring Transparency and Auditability

Compliance regulations require businesses to be transparent about their decision-making processes. Corticon.js provides a transparent and auditable decision-making process by tracking the inputs and outputs of each decision. This ensures that businesses can demonstrate compliance with regulations and respond to audit requests more easily.

Providing a Framework for Managing Decisions

Corticon.js provides a framework for managing decisions as enterprise assets, which can help businesses to ensure compliance with regulatory requirements. The system allows businesses to manage their decision-making processes more effectively, by providing a centralized repository for business rules and decision logic. This means that businesses can ensure consistency and accuracy in decision-making, while also providing a clear audit trail for regulatory compliance purposes.

Case Study

DBS, a leading financial services institution in Singapore and Hong Kong, has implemented an automated credit reporting capability around Progress Corticon to capture and enhance the organization’s knowledge and experience in a growing, robust, agile and adaptable set of models.

The company’s credit determination process was very manual and error-prone, and it was required to hold more capital in reserve for potential bad loans. To control costs, sustain growth, shield DBS from unnecessary risk, and grow the business, the company looked for ways to improve the existing process, strengthen its rules and build a more automated and fact-based process.

With the new system, DBS can change the way credit scoring is done and move at the speed of the market by implementing new rules to reflect new realities when needed.

DBS’s credit reporting system is based on regulatory sources such as the Monetary Authority of Singapore (MAS) and statistical analysis from the DBS Credit Portfolio Analytics Department. With Corticon, DBS routinely passes both internal and external audits by the MAS, reducing their own credit risk, and reducing the amount of funds that once had to be held in reserve to cover potential bad loans. Over the longer term, Corticon.js is also helping to improve operational speed, delivering and updating new credit-scoring models, reducing errors in models, and enhancing agility and adaptability. Read more here in full detail.

Concluding Thoughts

Progress Corticon.js provides a flexible and agile way to manage the rules associated with recurring decisions that businesses make every day. With Corticon, businesses can consistently maintain compliance, avoid financial penalties and reputation damage, maintain customer and investor confidence, and retain and attract new customers while optimizing the customer experience. Rules management has become a more iterative and agile process, enabling businesses to quickly and easily manage rules and adapt to regulatory changes.

Get a trial here.