It is normal for organizations to evaluate their performance towards the end of the year in order to discover areas where they may make improvements. As the year 2021 draws to a close, financial firms are taking stock of their compliance management systems. Although most companies think about how they can reduce or prevent compliance concerns, there are also compliance teams that strive to provide value to their organizations by contributing to their growth objectives and having a positive impact on their bottom lines.
The financial sector is entering an exciting new era in terms of regulatory compliance management. Due to the fact that most businesses do not anticipate compliance teams to directly contribute to the success of the organization, compliance has traditionally been regarded as a cost center for most enterprises.
In contrast, technological improvements in compliance management are fast altering the role that compliance managers can play in an organization’s operations. In order to add more value to the organization, compliance teams might use a variety of tactics to achieve their goals.
Increasing the Effectiveness of the Compliance Cost Equation
Small and midsized businesses frequently struggle to keep up with the rising costs of compliance. Personnel expenditures have been the most significant driver of compliance costs. The results of industry-wide polls of risk and compliance specialists have revealed that people’s expenditures can account for up to 7/10 of the entire cost of compliance.
This does not occur because organizations employ an excessive number of employees in the compliance team. The underlying explanation is straightforward: compliance is a vital domain that necessitates the use of highly experienced and qualified individuals. In other words, banks are well aware that experienced compliance experts are worth their weight in precious metals.
Unfortunately, this has the side effect of limiting the amount of compliance activity that an organization may maintain. Most firms are only able to establish a compliance department that is capable of dealing with the anticipated compliance concerns that arise within the organization. Starting pricey compliance projects that entirely re-framed the organization’s compliance management framework would necessitate the hiring of more personnel than most small to midsize enterprises could afford.
Compliance teams, on the other hand, can now leverage technology to improve compliance performance without having to grow the size of the compliance team to an unsustainable level. One significant advantage of compliance technology is that it automates numerous administrative processes that were formerly labor-intensive. This gives existing compliance staff the opportunity to focus on the big picture and take ownership of higher-level compliance improvement projects, allowing them to be more productive.
Providing Opportunities for Growth
Every time a financial organization or a bank decides to expand into a new market, compliance issues become a big consideration. In order to conduct business in a new geographic location, for example, the company must adhere to all of the regulatory requirements of the state in which it is operating. Because of the variations in the regulatory frameworks of the two states, this will be a massive task to complete.
By enhancing the speed and efficiency with which they can comply with a new regulatory framework, compliance teams in small and mid sized financial institutions can enable their organizations to grow. This is made possible by regulatory compliance technology.
Modern compliance management solutions allow enterprises to select the regulatory framework of a different authority with a few clicks and have all of the requirements instantly imported into the organization’s compliance management framework. As a result of the changes in the regulatory framework, technology can assist in parsing new regulatory documents and identifying the elements of a company’s operations that will be affected by the changes.
Ensuring Compliance as Opportunities Grow
Today’s risk and compliance professionals have access to innovative solutions that enable them to defend not only their own companies’ interests but also the interests of their customers and other stakeholders in the next year. Organizations’ ability to remain safe throughout these times of transition will be dependent on the effectiveness of their compliance and risk management programs.
When we look to the future, we can see that some industries will return rapidly, but others will require more time to regain their losses. For financial businesses, the outlook and internal requirements will fluctuate depending on the organization’s location, size, investments in other industries, the sorts of consumers it serves, and a variety of other factors. As a result, financial organizations will require dynamic solutions to assist them in navigating these turbulent times.
Compliance risk assessment software technology will play a key role in assisting compliance teams in meeting the deadlines set by new regulatory frameworks, new government policies, and new internal requirements set by firms.