Ensuring you are compliant with regulations is no easy feat, especially when it comes to the US market, where legal requirements vary from state to state. So how do you make sure you’re on top of everything?
In a conversation with Mukund Goenka, the CEO of Regology, at the recent SBC Summit North America, we delved into the ways in which artificial intelligence can be used to maintain compliance within an ever-changing regulatory environment.
For those who may not know, can you tell us a little bit about Regology? What’s the backstory to the company?
The Regology story goes back about 21 years when Pavan Bayyapu, CTO of Regology, and I started working at SAP on the engineering team. Then, fast forward to 2011 when Paul Bruin, CPO of Regology, and I worked at PwC. We worked together to help large banks manage their compliance programs amidst constant change. This was, and still is, in most cases, done manually. Think spreadsheets, emails, and SharePoint documents.
After a few years of doing this exercise manually – helping banks map applicable laws to their products and functions, we decided to work on automating this important function. Pavan brought his engineering and product development skills from 17 years at SAP, Paul his legal knowledge from the US and Europe, and me with compliance skills. We joined forces in 2017 to start Regology.
The product simplifies and automates the identification of regulations, alerts the user when there is a legislative change, and streamlines the compliance management process. Regology now has a continuously expanding database of close to 10 million laws from many countries. Automation of the compliance process is the key.
10 million laws, that’s a lot! From what you have seen, can you walk us through some of the current regulatory changes across the gaming landscape?
Across the gaming landscape, we tend to think of external factors such as regulatory changes, and internal factors such as new products or new ways to accept payments (like crypto).
Starting with external factors, we’ve seen many US states pass legislation to legalize gaming and sports betting, including Kansas, Maine, Massachusetts, Nebraska, and Ohio. These regulations come into effect as early as this quarter (Q3 2022). At the same time, many states are changing their existing legislation. As the operators think about entering these markets, they need to comply with all the laws already in place and factor in constant changes to these laws. There are also other topics such as data privacy, data localization, payment processing, and consumer protection. Each legislative topic progresses at a different pace, making it that much harder for an operator to track everything manually. Those are external factors.
Then there are internal factors – the operator is relentlessly looking to introduce new products, enter new markets, and improve player experience. So the ever changing internal factors need to be constantly rebalanced with the externally changing legislative landscape, while trying to remain compliant and grow responsibly. You can no longer solve this by throwing more bodies at it.
Fortunately, we now have Regology to automate the cumbersome tracking and mapping of laws to the business. Companies that use Regology find it easier to compete and comply effectively.
And you mentioned a bit about artificial intelligence earlier, how is Regology’s AI-based technology helping your partners to remain compliant within an ever-changing regulatory landscape?
That’s a great question. When you look at an operator and their compliance program, they must track and comply with tens of thousands of individual requirements across the US States and Territories. As a result of all this manual work needed to comply with these regulations, many requirements are missed. Thousands of hours are spent organizing and tracking this content. Regology uses AI-based technology to organize a Smart Law Library, based on products and functions. For example, an operator can organize laws based on products such as iGaming versus Sports Betting, as well as functions around AML/KYC, Labor, Privacy, ESG.
These laws and regulations are centrally tracked through the Smart Law Library, multiple teams can concurrently work on the platform, and produce compliance reports for examiners and auditors. As a result, gaming operators can cultivate a better reputation, increase customer safety, reduce government intervention, minimize financial and licensing penalty risks, and synergize compliance efforts across all regulatory efforts.
Looking back at our PwC days, our complex spreadsheets had become unmanageable. Today with Regology and its automation, compliance has become so much easier!
Is artificial intelligence the best tool when it comes to analyzing, deciphering, and interpreting regulatory changes? Or do we still need that human touch?
AI is a tool – it is not something that’s going to solve everything. Humans are still needed and will be needed in the future. But what AI is able to do is eliminate error-prone processes by automating labor-intensive, time-consuming, and repetitive efforts.
For example, when a law is revised, I may need to read through hundreds of pages to find the exact changes. And whether I’m looking at a new or a revised law, I need to understand the impact of those changes by collaborating with many colleagues across the organization. With Regology’s AI, most of these efforts can be automated so the human in this effort is doing higher value work, setting up controls, or handling errors.
Given that regulations are changing on a near daily basis, how do you keep up to date with all these developments? Because it sounds quite tricky…
Yes, you are right. Tracking changes across 10 million laws manually was next to impossible. Thankfully, our skilled engineering team has built algorithms that automate this daily tracking for each individual customer. We have a sophisticated team of legal researchers that use the platform and conduct quality checks. Our expert colleagues research laws specifically for the gaming industry, which provides a human touch.
We’re eight months into the year now. What can we expect from Regology in the next couple of months?
We are laser-focused on our customers and on innovation.
Our users saw significant benefits when we improved horizon scanning, i.e., tracking changes to bills, laws, and regulations. We will continue investing heavily in this space.
We plan to transform the way users engage with laws. The software will do a deeper analysis of the laws as they change and impact a business. Our user interface will also go through a significant transformation, to present information in a timely manner to the right people and in the right workflows. We will also continue expanding our platform outside the US to include key gaming markets.
All in all, you can expect transformative user experience, automation, and better coverage in Regology in the coming months, making your life easier as a compliance professional.