Skip to main content

OCC Sets a Digital Transformation Example for Highly Regulated Industries

Ben Farrell
April 16, 2018

Businesses in highly regulated industries are facing an uphill battle in the digital revolution enveloping the enterprise. While these organizations are often facing the same need to embrace modern technologies as other companies, they are frequently forced to take a conservative approach to innovation because they can't risk any sort of disruption. This is clear in sectors ranging from financial services to pharma, and it's time for a change.

Rapid technological advances don't have to come with significant risk, and digital transformation platforms are helping companies embrace progress without having to set aside security.

A Regulatory Example From Finance

The Federal Reserve identifies some organizations as financial market infrastructures. These companies represent the underlying fiscal ecosystems that keep the economy moving, and include clearinghouses, trade repositories and securities settlement systems among their number. They handle a few key roles in the U.S. economy:

    • Creating a foundation for safe and stable economic operations.

    • Providing controls and risk management surrounding complex financial ecosystems.

    • Offering sufficient efficiency to keep fiscal wheels turning smoothly on an everyday basis.

There is a great deal of pressure on these organizations to work with excellence and document every process to stand up to regulatory scrutiny. This reaches a boiling point for systemically important financial market utilities - organizations that are determined to be not only the infrastructure that the economy runs on but also critical in nature.

"Businesses in highly regulated industries are facing an uphill battle in the digital revolution."

Regulatory compliance is critical for such entities, and Dodd-Frank standards lay out a complex web of best practices and requirements that must be not only adhered to but also documented at every turn to stand up to an audit.

Systemically important financial market utilities are among the heavily regulated organizations facing major barriers to digital transformation, but one such company shows that innovation is possible with Appian creating a path to progress.

How OCC Used Appian to Drive Change

The Options Clearing Corporation is the largest equity derivatives clearinghouse in the world. The organization has been going through a continual evolution alongside the marketplaces it serves, and there are plenty. It clears all forms of equity options and stock loan transactions across 19 distinct trading platforms. With such a large operational footprint, the organization needed a way to embrace digital technologies while adjusting to its recently designated status as a SIFMU. It was a daunting challenge, but Appian stepped in to tip the scales in OCC's favor.

Prior to working with Appian, OCC was, like many organizations in highly regulated sectors, dealing with scattered digital projects and paper-based processes. It was dependent on manual processes built around spreadsheets, paper forms and files saved across a variety of siloed locations. At times, a task would move between users by individuals passing paper documents from one staff member to another. This methodology wasn't tenable, and regulatory audits were a troublesome exercise in gathering huge stacks of paperwork that analysts would have to pore through. Digital transformation changed all of this.

"The first app OCC created in Appian took about six weeks."

OCC currently uses Appian for its regulatory filing processes within the legal department, in its corporate actions division and for its new products development team. The results are already generating excitement. With Appian, all of the data that was segregated in spreadsheets, files and paper documents is integrated into a central platform. When employees make a decision or complete a task, the process is automatically documented in the platform, creating a digital paper trail with all the metadata necessary to withstand scrutiny. When auditors come in, OCC doesn't have to gather all kinds of paperwork; they just give the new users access to the platform and let them get to work.

Appian has empowered OCC to transform its processes and operate more efficiently:

    • The system automatically tracks product development from creation through installation into the legacy system. Every part of the process is managed in Appian.

    • The low-code functionality in the platform has accelerated solution creation. The first app OCC created in Appian took about six weeks. Now, the company can roll out a new app in a day.

    • The technology has allowed OCC to think big about potential future use cases.

OCC has established a strong foundation with Appian. It has become a digital business without having to sacrifice the control it needs over data assets. With this base in place, the company is exploring new options. In particular, the organization is looking into how it can use robotic process automation. Its hope is that it can leverage RPA to eliminate repetitive backend work so employees can be free to handle higher-value analytics tasks.

OCC has gone from a company adjusting to the pressure of its designation as a SIFMU to a business that is now looking at how it can revitalize and transform the work it does every day.

Changing Perceptions in Regulated Industries

If you're in healthcare, pharma, financial services, energy or similarly regulated industries, you may have turned away from the wave of digital transformation thinking there's no way companies in your sector can handle that. The simple reality for many companies with such critical responsibilities is that technology always has to take a backseat to the mission. But what happens when the effort that goes into regulatory compliance becomes so great that keeping up undermines core organizational goals? This is happening across a variety of sectors.

Pharma companies can get so bogged down in checking regulatory boxes that they can't get shipments out in a cost-efficient way or research new drugs without excessive risks. Many financial companies can't engage underserved consumers because they're spending so much on manual processes related to risk management that they can't afford to broaden their services. These types of problems are holding plenty of companies back, but that doesn't have to happen to your organization.

Digital transformation platforms are empowering organizations to coordinate and automate operations without creating regulatory risk. The Appian ecosystem features built-in checks and balances, including controls that IT can put into place, to ensure data is safe and regulatory rules are followed at all times. OCC shows how an organization facing tight regulations can still innovate. Check out the full video embedded above to learn more or head to our customer videos page to see how other Appian clients in sectors such as pharma, government and banking transformed around digital.