How do you solve the compliance puzzle?
In a post-pandemic world, economic and geopolitical change, banking crises, cyber threats and volatile crypto markets, represent an ongoing challenge for compliance officers. Regulators including the US Securities and Exchange Commission (SEC) and the UK Financial Conduct Authority (FCA), are responding to this changing environment with increased regulatory scrutiny and compliance measures. Higher standards are being set and regulators are committed to moving at speed to prevent serious harm to financial markets. The SEC and FCA have also both expressed their intention to base their decisions on data to enhance their oversight of markets and to identify potentially harmful activities. [1]
A combination of increased volatility and changing regulatory demands, with many moving parts, have also increased the complexity and challenge of regulatory compliance. While regulation may be seen as complex and onerous, it is nevertheless non-negotiable – non-compliance is not an option.
So what is at the heart of this complex puzzle and how can you protect your business and yourself when this puzzle seems such a hard nut to crack? And, beyond the obligation of regulatory compliance, are there hidden business benefits to embracing the process wholeheartedly?
A complex puzzle to solve
The complexity of complying with a wide range of regulatory mandates is a moving feast. Regulators around the world will continue to mandate new regulations to prevent harm from emerging risks to financial markets. This will add extra dimensions of complexity to compliance for the foreseeable future. Where processes are inconsistent, the risk of adverse outcomes under such compliance scenarios is high. As a result, early warning signs of non-compliance can be missed or easily overlooked. This can then lead to escalating risks and breaches in compliance that are discovered at a late stage. Shortcomings are often found when compliance processes are not standardised or automated. We believe this is the root cause of complexity in compliance.
Such vulnerabilities in compliance and surveillance can result in reputational damage to your brand. Compliance failures could also expose senior company officers to the risk of personal criminal prosecution. This has upped the stakes for those who fail to crack the compliance puzzle.
Thankfully complexity and risks that form the compliance puzzle, can be mitigated and controlled by using advanced compliance solutions. We believe regulatory compliance should not be seen as an onerous puzzle or an end in itself. Innovative compliance solutions can also be business enablers that empower institutions to make even better strategic decisions. And, there are additional business benefits to be gained from the valuable data treasure that such solutions can uncover as part of the compliance process.
A holistic approach to compliance
The regulatory framework is outside the control of solution providers or financial institutions. However, with the benefit of expert insights, advanced solutions and a customer centric approach, it is possible to demystify, standardise and automate the compliance process.
Even though new regulations may seem complex initially, for seasoned experts it is simply business as usual. As a trusted partner, safeguarding customer interests for over thirty years, we have tailored our own innovative solution CMC:eSuite, to match market requirements. Our deep expertise in data analysis and continuous, innovative development have informed a modular approach to managing complexity. This can be achieved by integrating modular compliance processes into a holistic compliance solution.
Advanced analytical tools such as CMC:Open Dashboard can help you to visualise data and gain valuable insights into the workings of compliance processes. The data that is analysed as part of this holistic compliance process, can also be harnessed to release valuable hidden data treasure and streamline other business processes across your organisation.
Uncovering treasure in your data
The insights gained from data analysed during the compliance process, can transform your compliance function into a business centre. This development will have the potential to generate valuable commercial insights and profits. Some examples of the business benefits to be gained include:
- Valuable business intelligence via data visualisation and data analysis can help to improve strategic decisions at board level regarding resource allocation.
- Reliable compliance management enables financial institutions to concentrate on generating long-term, sustainable profits.
- Robust compliance processes reinforce trust, protect your corporate reputation, boost shareholder confidence, while strengthening your brand equity.
Solving the compliance puzzle and moving forward
To demystify complexity and solve the compliance puzzle, investment in appropriate data visualisation tools, as well as the expertise to analyse that data, is vital. If you have full visibility and understanding of your data, then there is nothing to fear from new and future regulation.
We see a future where the compliance function evolves from a cost-centre, focused solely on regulatory compliance, into a business centre, enabling profit centres within the business to generate profits sustainably. This will be possible due to the valuable business data that can be analysed as by-product of the compliance process.
Increasingly advanced, innovative compliance solutions will accelerate the visualisation, analysis and use of this business data. Consequently, compliance will become embedded into company management and business intelligence functions. And, as the future comes into sharper focus, it will become clearer that the master key to solving the compliance puzzle can be found where it always has been – in the data.
[1] https://www.fca.org.uk/publication/corporate/our-strategy-2022-25.pdf#page=3 and https://www.sec.gov/files/2023-exam-priorities.pdf