Lenders Must Embrace Regulatory Tech To Comply With 1M State and Federal Banking Laws

As it stands, the nation’s mortgage lenders currently face a mix of 7,000 state and federal laws and regulations governing their industry, with another 32,000 individual mandates that flow from them.

And that’s just what one industry must comply with within a total matrix of more than 1 million federal and state laws that also face ongoing updates and amendments, often with little notice or consultation.

The compliance burden, or more specifically the effort to simplify complying with all of that law, is why Rohin Tagra founded Azimuth GRC and its codified regulatory compliance platform five years ago.

“You don’t have a chance — you know, a fair, realistic chance — of making sure you’re covered if you don’t have a systematic way of doing it,” Tagra told PYMNTS.

It seems investors have also seen the value of compliance automation as Azimuth announced today (Jan 11) that it had secured a strategic investment from Truist Ventures — the investment arm of the nation’s sixth-largest lender, just two months after securing its initial Series A round of funding.

Full Population Testing with Automated Compliance Technology

Azimuth GRC said the latest investment would be used to grow the team, product suite and go-to-market efforts. Tagra said that just as Amazon went from selling books to selling everything, Azimuth GRC’s service to the mortgage industry is just the beginning.

“We start with mortgage, but we can take this to the next product lines in banking — so, credit cards, personal loans, auto,” Tagra said. “What’s next beyond that is any industry. Any industry that’s heavily regulated has the same concerns — hospitals, healthcare, pharma, airlines.”

With its automated compliance technology, Azimuth GRC does full population testing. For example, it tested more than 500,000 loans for all the CARES Act requirements in about 20 minutes for one client.

“It would take that company 500 people and a year to do that one time, and we can do it regularly,” Tagra said.

Equitable and Fair Experience for Every Customer

Beyond compliance, this solution enables clients to provide an equitable and fair experience for every customer, he added. Azimuth GRC’s platform tests that its clients have reported their customers’ credit bureau correctly and haven’t charged them a fee. He noted that when companies make mistakes, it means their customers may not be able to access capital or may be charged a fee unfairly.

“So, that’s what we’re, at the end of the day, solving for,” Tagra said.

With the latest investment, Azimuth GRC will continue to add functionality to the platform, and with the partnership with Truist Ventures, it will be able to work on other lines with them.

“We’ll continue to add more testing to the different verticals like mortgage,” Tagra said. “We’ve built 200 tests already, which cover thousands of conditions, and we’ll add more tests based off of customer demand.”

A Proactive Solution to Prepare for Heightened Scrutiny

The demand for such a solution is likely to be accelerated by the heightened scrutiny coming from the Biden Administration and the Consumer Financial Protection Bureau (CFPB), Tagra said. This makes it even more important to be in compliance with regulations.

“We’ve already seen that there’s been regulatory actions that have already come out of the new agency,” Tagra said. “If you look at those actions that have come out and the things that they’re looking at, those are the things that we help to solve proactively.”