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If you're a compliance officer at a bank or fintech, you already know the drill when it comes to testing and assurance: sampling 10% of accounts or loan applications quarterly, hoping those samples represent your entire population, and praying nothing slips through the cracks in between testing cycles.
Here's the problem: that approach was designed for a different era. When transaction volumes were manageable. When fraudsters were less sophisticated. When regulators were content with lighter-touch oversight.
But today's compliance teams face exponentially higher transaction volumes, increasingly complex regulations, and a fight for every last dollar of margin. Meanwhile, regulators expect more than spot checks. They want proof that your controls work, consistently, across your entire operation.
That's where automated control testing comes in.
Automated control testing uses software to continuously validate that your compliance controls are working as designed, across 100% of your records, 100% of the time.
Instead of manually sampling a fraction of your data periodically, automated control testing performs full population testing on a recurring basis. Every transaction, account, dispute, complaint. Every control. Continuously.
Here's how it works:
1. Control Definition
You define your compliance controls in a control library, either taking them from specific pieces of regulation or from your procedures.
2. Continuous Monitoring
The system monitors all records and activities in real-time or near-real-time, testing each one against your defined controls automatically.
3. Automated Alerts
When the system detects a record has not complied with a control, it generates automated alerts immediately, rather than weeks or months later during your next manual review cycle.
4. Evidence Collection
The system keeps an audit log of remediation steps as evidence that can be shared with stakeholders, including regulators.
Think of it this way: Manual control testing is like checking one of your four brakes, once a quarter, and hoping the others work as well. Automated control testing monitors all your brakes, continuously, and tells you if any will fail the next time you drive.
Before we get into the benefits of automating it, let's be honest about what manual testing really means:
Limited Coverage
Sampling 10-20% of accounts and transactions means 80-90% of your risk exposure goes untested. You're essentially hoping that your sample is representative and that nothing catastrophic is happening in those you didn't review.
Time Lag
Quarterly or monthly testing cycles mean that by the time you discover a control issue, the damage has already been done. You have an expensive remediation project on your hands, and the regulators breathing down your neck.
Resource Intensive
Manual testing consumes enormous staff hours. Your compliance team spends weeks pulling data, reviewing samples, documenting findings, and generating reports, which is time that could be spent on strategic risk management.
Human Error
Manual processes are subject to inconsistency, fatigue, and mistakes. Different reviewers may interpret controls differently, and spreadsheet errors happen.
Not Scalable
As your institution grows, manual testing doesn't scale. You either need to hire more staff (expensive) or test a smaller percentage of accounts and transactions (riskier).
The reality? Manual control testing was never designed for the volume, velocity, and complexity of modern banking.
Automated control testing doesn't just improve on manual methods, it fundamentally changes what's possible for compliance programs.
Automated systems can test thousands of transactions in seconds, which is work that would take compliance staff weeks or months to complete manually. This speed means your highly trained team of compliance experts spends less time on repetitive testing tasks and more time on analysis, remediation, and strategic initiatives.
More importantly, you can test exponentially more of your compliance program without adding headcount.
Software doesn't get tired, and it doesn’t misread a spreadsheet cell. It applies the same logic consistently across every record, every time.
This consistency is critical when regulators examine your program. You can demonstrate that every control was tested against 100% of relevant records using identical criteria.
Full population testing with continuous monitoring means you catch problems immediately, not months after they occur. Every Compliance Officer knows how time consuming, expensive and demoralizing remediation projects are. Well, say goodbye to them!
A control that's failing? You know within minutes or hours, not after your next quarterly review. This proactive approach fundamentally improves your control design and risk posture. You're not managing risk in the rearview mirror - you're managing it in real-time.
The math here is straightforward. Automated control testing reduces the hours your compliance team spends on manual testing, freeing up capacity for higher-value work. It also reduces the cost of control failures, because catching problems early means smaller remediation costs, fewer regulatory findings, and less reputational damage.
For institutions worried about scaling their compliance program as they grow, automated testing solves the equation: you can increase customer account and transaction volumes without proportionally increasing compliance headcount.
Automating control testing provides resilience against your team leaving. When someone walks out the door in the world of manual testing, they make take with them the knowledge about what your controls are, how they are set up, and any testing scripts. Finding people who can jump in to perform the same level of testing, without gaps, can be hard.
By automating control testing you will not only have a clearly defined controls library, but also the comfort that testing won’t stop just because your people are changing.
Perhaps the most valuable benefit: confidence.
Confidence that your controls are actually working, and confidence when you walk into your next regulatory exam.
With full population testing, you're not hoping your sample was representative. You know. You’ve already discovered any problems with your compliance programs, and you’ve addressed them proactively.
That confidence extends beyond compliance teams. Executive leadership gets better visibility into the control environment. Board members can ask tougher questions and get data-driven answers. And when regulators come calling, you have comprehensive evidence that your program isn't just compliant on paper, but it's effective in practice.
Let's clear up a common misconception: automated control testing doesn't replace human judgment. It augments it.
You still need experienced compliance professionals to design controls, interpret results, investigate alerts, and make risk-based decisions. What automated testing does is eliminate the repetitive, manual work that buries your team and replace it with comprehensive, real-time data that makes those professionals more effective.
Automated control testing also isn't a magic solution that eliminates all compliance risk. Controls can still have design flaws. New fraud patterns can still emerge. Regulatory expectations can still shift.
What automation does is ensure that the controls you've designed are working as intended, at scale, continuously, so that you can focus on the strategic work of improving your program rather than just proving it exists.
Ready to see what automated control testing looks like in practice?
Cable provides the only Automated Compliance Testing platform built specifically for banks, fintechs and crypto companies. With continuous monitoring across 100% of records for regulations such as the Bank Secrecy Act, Money Laundering Regulations, Regulation E, Regulation B and UDAAP, learn how Cable can help you be more effective cable.tech/demo.
The Benefits of an Automated Risk Assessment
Conversations with Compliance Champions: Insights from Hummingbird's CEO, Joe RobinsonIf you're a compliance officer at a bank or fintech, you already know the drill when it comes to testing and assurance: sampling 10% of accounts or loan applications quarterly, hoping those samples represent your entire population, and praying nothing slips through the cracks in between testing cycles.
Here's the problem: that approach was designed for a different era. When transaction volumes were manageable. When fraudsters were less sophisticated. When regulators were content with lighter-touch oversight.
But today's compliance teams face exponentially higher transaction volumes, increasingly complex regulations, and a fight for every last dollar of margin. Meanwhile, regulators expect more than spot checks. They want proof that your controls work, consistently, across your entire operation.
That's where automated control testing comes in.
Automated control testing uses software to continuously validate that your compliance controls are working as designed, across 100% of your records, 100% of the time.
Instead of manually sampling a fraction of your data periodically, automated control testing performs full population testing on a recurring basis. Every transaction, account, dispute, complaint. Every control. Continuously.
Here's how it works:
1. Control Definition
You define your compliance controls in a control library, either taking them from specific pieces of regulation or from your procedures.
2. Continuous Monitoring
The system monitors all records and activities in real-time or near-real-time, testing each one against your defined controls automatically.
3. Automated Alerts
When the system detects a record has not complied with a control, it generates automated alerts immediately, rather than weeks or months later during your next manual review cycle.
4. Evidence Collection
The system keeps an audit log of remediation steps as evidence that can be shared with stakeholders, including regulators.
Think of it this way: Manual control testing is like checking one of your four brakes, once a quarter, and hoping the others work as well. Automated control testing monitors all your brakes, continuously, and tells you if any will fail the next time you drive.
Before we get into the benefits of automating it, let's be honest about what manual testing really means:
Limited Coverage
Sampling 10-20% of accounts and transactions means 80-90% of your risk exposure goes untested. You're essentially hoping that your sample is representative and that nothing catastrophic is happening in those you didn't review.
Time Lag
Quarterly or monthly testing cycles mean that by the time you discover a control issue, the damage has already been done. You have an expensive remediation project on your hands, and the regulators breathing down your neck.
Resource Intensive
Manual testing consumes enormous staff hours. Your compliance team spends weeks pulling data, reviewing samples, documenting findings, and generating reports, which is time that could be spent on strategic risk management.
Human Error
Manual processes are subject to inconsistency, fatigue, and mistakes. Different reviewers may interpret controls differently, and spreadsheet errors happen.
Not Scalable
As your institution grows, manual testing doesn't scale. You either need to hire more staff (expensive) or test a smaller percentage of accounts and transactions (riskier).
The reality? Manual control testing was never designed for the volume, velocity, and complexity of modern banking.
Automated control testing doesn't just improve on manual methods, it fundamentally changes what's possible for compliance programs.
Automated systems can test thousands of transactions in seconds, which is work that would take compliance staff weeks or months to complete manually. This speed means your highly trained team of compliance experts spends less time on repetitive testing tasks and more time on analysis, remediation, and strategic initiatives.
More importantly, you can test exponentially more of your compliance program without adding headcount.
Software doesn't get tired, and it doesn’t misread a spreadsheet cell. It applies the same logic consistently across every record, every time.
This consistency is critical when regulators examine your program. You can demonstrate that every control was tested against 100% of relevant records using identical criteria.
Full population testing with continuous monitoring means you catch problems immediately, not months after they occur. Every Compliance Officer knows how time consuming, expensive and demoralizing remediation projects are. Well, say goodbye to them!
A control that's failing? You know within minutes or hours, not after your next quarterly review. This proactive approach fundamentally improves your control design and risk posture. You're not managing risk in the rearview mirror - you're managing it in real-time.
The math here is straightforward. Automated control testing reduces the hours your compliance team spends on manual testing, freeing up capacity for higher-value work. It also reduces the cost of control failures, because catching problems early means smaller remediation costs, fewer regulatory findings, and less reputational damage.
For institutions worried about scaling their compliance program as they grow, automated testing solves the equation: you can increase customer account and transaction volumes without proportionally increasing compliance headcount.
Automating control testing provides resilience against your team leaving. When someone walks out the door in the world of manual testing, they make take with them the knowledge about what your controls are, how they are set up, and any testing scripts. Finding people who can jump in to perform the same level of testing, without gaps, can be hard.
By automating control testing you will not only have a clearly defined controls library, but also the comfort that testing won’t stop just because your people are changing.
Perhaps the most valuable benefit: confidence.
Confidence that your controls are actually working, and confidence when you walk into your next regulatory exam.
With full population testing, you're not hoping your sample was representative. You know. You’ve already discovered any problems with your compliance programs, and you’ve addressed them proactively.
That confidence extends beyond compliance teams. Executive leadership gets better visibility into the control environment. Board members can ask tougher questions and get data-driven answers. And when regulators come calling, you have comprehensive evidence that your program isn't just compliant on paper, but it's effective in practice.
Let's clear up a common misconception: automated control testing doesn't replace human judgment. It augments it.
You still need experienced compliance professionals to design controls, interpret results, investigate alerts, and make risk-based decisions. What automated testing does is eliminate the repetitive, manual work that buries your team and replace it with comprehensive, real-time data that makes those professionals more effective.
Automated control testing also isn't a magic solution that eliminates all compliance risk. Controls can still have design flaws. New fraud patterns can still emerge. Regulatory expectations can still shift.
What automation does is ensure that the controls you've designed are working as intended, at scale, continuously, so that you can focus on the strategic work of improving your program rather than just proving it exists.
Ready to see what automated control testing looks like in practice?
Cable provides the only Automated Compliance Testing platform built specifically for banks, fintechs and crypto companies. With continuous monitoring across 100% of records for regulations such as the Bank Secrecy Act, Money Laundering Regulations, Regulation E, Regulation B and UDAAP, learn how Cable can help you be more effective cable.tech/demo.
