In the heavily regulated space of financial services, regulatory compliance isn't just a requirement – it's a strong force that shapes the operations of global banks. Recognizing this, ING, a leader in the banking world, saw the complexities of regulatory change management not as a hurdle, but as a call for transformative action. This shift in perspective, catalyzed by substantial regulatory scrutiny from regulators, highlighted the need for robust and reliable compliance mechanisms and marked the beginning of a journey towards Sparq, the first end-to-end regulatory change management solution.
Sparq came forth as a critical development. Born from the collaboration between Eli5 and ING, Sparq was a leap into the future and served as a commitment to excellence and proactive change. The challenge? To create an unparalleled, end-to-end regulatory change management tool designed explicitly for ING's unique requirements.
ING's internal team had already set the foundation for this ambitious project through thorough due diligence and preparation. They had not only established a clear business case but had also gained a deep understanding of the underlying challenges within the organization. This groundwork was crucial for Eli5 to get to work on the product.
Our role as Eli5 was clear: to blend our approach to building tech products with the insights and experiences of ING's team. The goal was ambitious yet clear – to make ING’s regulatory compliance radically more efficient and effective. We aimed to turn a complex and mostly manual process into something streamlined, efficient, and agile, mirroring the accelerative philosophy of both ING and Eli5. Sparq was envisioned as a leading compliance tool and set to become a benchmark within the RegTech domain.
Project Background
This project was an opportunity to reshape the approach to regulatory change management, bringing a fresh perspective to a traditionally complex process. Our role in this collaboration was multifaceted. By merging Eli5's expertise in product development and engineering with ING's comprehensive understanding of regulatory compliance, we aimed to create a solution that radically impacted the bank’s effectiveness and efficiency regarding regulatory change. The goal was to build a product that was effective and robust while being inherently intuitive and scalable and capable of being seamlessly integrated across ING’s global operations.
Our methodology was dynamic, involving regular feedback and brainstorming sessions that stimulated an environment for ideas to grow and materialize rapidly. This approach, grounded in our product development framework, Eli5 Decode, along with our mutual forward-thinking mindset, played a fundamental part in developing Sparq. The result, which we dive into later, was a significantly improved quality of regulatory compliance, shorter regulatory change cycles, and a quicker response to incidents.
Objectives and goals
The objectives for the project were clear yet ambitious. At the heart of Sparq laid the mission to solve one of the challenging problems within the bank, to streamline regulatory change management in banking. Building Sparq meant breaking the status quo and introducing a new way of dealing with regulatory pressure. From enabling transparency and collaborative working between all compliance trajectories, to helping the bank create streamlined and uniform governance models for its regulatory change processes.
The objective was to create a system that could work in the Dutch legal and compliance departments while anticipating scaling the solution to other countries in which ING operates. Our combined vision for Sparq included streamlining workflows, enabling full transparency between the vast number of compliance initiatives, reducing manual processes, and diminishing the margin for error. By offering comprehensive, real-time insights into regulatory changes, updates, and requirements, we helped ING's compliance teams with the information needed to make informed, proactive decisions. This level of transparency and foresight was crucial in both maintaining compliance and in driving strategic regulatory planning to respond swiftly to new regulations.
Additionally, we aimed to create an extensive audit trailing functionality for internal and external auditors to create a holistic view of ING’s regulatory compliance. This has led to an entirely separate part of the product where auditors have their dashboard to see and inspect all traces between regulations and the bank’s policies. The cherry on the pie, and one of the most impactful features we’ve created.
After the effectiveness was secured, the secondary goal was to reduce compliance trajectories’ timelines by 20%. The product we’ve built delivered an average efficiency gain of 40%, with examples of bringing two-year trajectories down to six months. Resulting in cost savings of over $30M annually.
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Product Development Process
In order to move quickly, we started with building a Minimum Viable Product (MVP), which we have built and validated within 10 weeks. After this, we evolved into the development of a comprehensive, full-fledged product.
Phase 1: MVP Development
All great things start small. The MVP phase was about validating the product's essence and collecting feedback from all involved departments. It was an iterative process where mapping product flows and developing an initial working product were critical. The MVP was a tangible, focused expression of our core idea, crafted to test the waters in the real world.
The MVP focused on basic yet essential functionalities, covering ING’s regulatory change management from end-to-end. It aimed to digitize the process of going from incoming regulatory changes to interpreting the requirements and creating policy documents for employees, customers, and partners. All while integrating these elements into a user-friendly interface. While we were aware of the many needed functionalities, we kept things as simple as possible to ensure validation of the essential cross-department collaboration.
User feedback played a pivotal role in this stage. We engaged with actual users, gathering insights and observations that were invaluable. This user feedback loop has played a role till far into the future, ensuring that every iteration of the product was a step in the right direction. Within a month, we had the desired validation to push the product to the next level and gathered more than enough feedback to set the direction for the next development phase.
Phase 2: Full Product Development and beyond
With a validated MVP, we transitioned into full-scale product development, focusing on three core components: Horizon Scanning, Dynamic Governance and Control Flows, and Policy Creation.
Horizon Scanning was designed to be the proactive arm of Sparq, constantly scanning the regulatory landscape for changes and potential impacts. This component ensured that ING was always ahead of the curve, equipped with the latest regulatory information.
Dynamic Governance and Control Flows brought agility to compliance processes. This component automated the tracking and management of regulatory changes, seamlessly integrating them into existing workflows, enhancing efficiency, and reducing errors. We built this part of the product so that it could be customized to the vast amount of different protocols and workflows among the many different countries in which ING operates.
Document Creation was the cornerstone of this phase, allowing for the rapid development and deployment of compliance policies. This feature helped the bank to create policies and a variety of other documents, ensuring they were relevant, up-to-date, and effectively communicated across the organization.
Throughout this phase, customization and collaboration were not just features; they were philosophies. Sparq was tailored to fit ING's unique needs, ensuring that every aspect of the solution resonated with its operational ethos. Collaboration features enabled seamless interaction between different teams and departments, fostering a culture of shared responsibility in regulatory compliance.
Customization and collaboration were key themes throughout this phase. We tailored Sparq to align closely with ING's specific requirements, ensuring the solution perfectly fits their operational needs. The collaboration tools incorporated into Sparq enabled a culture of sharing knowledge and pushed teamwork in managing regulatory compliance, manifesting our vision of a holistic and end-to-end regulatory change management solution.
Technical Approach
Sparq's technical foundation is a cohesive blend of modern, scalable technologies, each chosen to create a solution that is robust, adaptable, and future-proof. At its core, Sparq utilizes a microservices architecture, an architectural choice that brings several distinct advantages. This architecture allows for the development of independent components that can be updated, deployed, and scaled without impacting the entire system. It’s similar to working with a set of specialized, intercommunicable tools, each tuned for its purpose, yet collectively forming a cohesive whole.
Customizability is a cornerstone of Sparq. Recognizing the unique nature of each regulatory challenge, Sparq was designed to be highly configurable. This adaptability ensures that as ING's needs evolve, so too can Sparq. It is not merely a static tool but a dynamic solution that grows and changes in alignment with the regulatory landscape and the bank's operational strategies.
A core element of Sparq’s technical strategy is its OpenAPI connections. These connections allow for seamless integration with existing systems within ING, facilitating a smooth flow of information. This interoperability is crucial, enabling the bank to leverage its current technological investments while adopting Sparq. OpenAPI connections also offer the flexibility to integrate with future systems or third-party tools, ensuring Sparq remains relevant and useful as the technological ecosystem evolves.
The deployment of Sparq on Kubernetes underscores our commitment to scalability and reliability. Kubernetes, a powerful container orchestration system, ensures that Sparq can manage its workload efficiently, maintain high availability, and scale seamlessly in response to ING's demands. This choice exemplifies our forward-thinking approach, ensuring that Sparq is not just effective for today’s needs, but is primed to handle tomorrow's challenges as well.
In summary, the technical approach to developing Sparq was carefully planned to ensure it was future-proof and adaptable along with being robust and reliable. The synergy of microservices architecture, customizability, OpenAPI connectivity, and Kubernetes deployment creates a solution positioned at the forefront of RegTech innovation.
Methodology
The methodology underlying the development of Sparq is rooted in Eli5 Decode, our studio’s product development framework. This framework is the backbone of our process, ensuring that every development phase, from conception to deployment, is executed with precision and purpose.
Central to Eli5 Decode is a design-driven approach. This approach prioritizes the user experience at every stage, ensuring that the final product is not just technically sound, but also intuitive and user-friendly. It's about building a solution that resonates with the end-user, making complex regulatory processes accessible and manageable. This design focus profoundly impacts innovation and ensures product development is aligned with real-world use cases.
Our team structure is dynamic and flexible, enabling us to adapt quickly to changing requirements and new insights. This agility enables us to move expertise in and out of the project as we see fit. Coupled with a test-driven development philosophy, along with following security-by-design principles, we ensure that every component of Sparq is built on a foundation of reliability and quality.
High-quality and precise deliveries are the standard for us. Adhering to agile practices, our development process is marked by a high shipping cadence. This rapid pace allows us to iterate quickly, adapting to feedback and evolving needs. It’s a rhythm that keeps the team focused and the product continuously improving.
Security is critical in the financial sector, and we address this through rigorous external audits and penetration tests. These processes are vital in ensuring that Sparq is not just effective, but also secure and robust.
Finally, a continuous user feedback loop is critical to our methodology. This loop ensures that the product roadmap is always aligned with user needs and experiences, facilitating constant improvement and refinement. It’s a cycle of feedback and enhancement that kept Sparq at the forefront of innovation.
Results and Impact
The implementation of Sparq marked a significant transformation in ING’s regulatory change management. The results were measurable and profound, both quantitatively and qualitatively.
From a quantitative perspective, the most striking outcome was a radical improvement in the bank's effectiveness on their regulatory compliance and a whopping 40% reduction in compliance trajectory timelines. Before Sparq, adapting to regulatory changes was mostly manual and incredibly time-consuming. With Sparq, we've streamlined these processes, significantly reducing the trajectory time. This efficiency is not just a matter of saving hours or days; it represents a fundamental shift in how quickly ING can respond to regulatory changes, giving them a competitive edge in the banking world.
Qualitatively, Sparq has redefined the landscape of regulatory compliance within ING. The intuitive and user-centric design of the platform has made compliance processes more accessible and manageable for everyone involved. This ease of use is critical in a domain traditionally seen as complex and intimidating.
The impact on ING’s regulatory change management has been far beyond transformative. Sparq has enabled a more agile, responsive approach to regulatory compliance, ensuring that ING stays ahead of the curve in an ever-evolving regulatory environment.
Although ING’s focus was to primarily increase effectiveness, the efficiency gains resulted in significant cost savings. Mind these are not official numbers, but the potential cost savings for ING could be as high as $30M annually on labor costs, plus the avoidance of possible fines for lacking regulatory compliance, which have been as high as $900M in 2018. This result shows the financial efficacy of Sparq and indicates the broader operational efficiencies it has brought with it. By reducing redundancies and optimizing processes, Sparq has proved to be an investment that pays dividends, both in terms of financial returns and operational excellence.
Conclusion
Sparq stands as a showcase of the power of innovative thinking in building digital products and addressing complex regulatory challenges. The partnership between ING and Eli5 has borne fruit in the form of a platform that simplifies compliance and transforms the bank’s regulatory change management into a strategic advantage. The key achievements of Sparq – reducing compliance trajectory time, streamlining processes, and realizing significant cost savings – have pushed ING ahead of the curve. Its flexible but robust architecture and user-centric design set a new standard for how financial institutions approach regulatory change management. As Sparq continues to evolve, its potential to influence and shape the future of RegTech is immense. It plays a massive part in the beginning of a new era in regulatory compliance solutions.
