Compliance that works – without stifling growth

In the past, the industry didn’t always invest enough in compliance. Now, with regulation transformed in the wake of the financial crisis, that’s changing. That means compliance officers have a huge job on their hands. They need to follow complex new regulations, manage risks (emerging ones as well as those that have always been around), and support management in making strategic decisions.

Taking a fresh look

  • First, look at regulators’ expectations and see how your compliance arrangements compare. Where are the gaps and weaknesses?
  • Look at the roles each person plays in compliance too, as well as the roles of the three lines of defence. How do they combine to give you effective compliance? Can you revise them to make them more effective?
  • Is your compliance structure cost-effective? And is it fulfilling regulatory obligations and producing  fair outcomes for customers without stifling growth?

State of the art, and cost-effective

Budgets are bigger now, but there’s still a lot of pressure to be as cost-effective as possible. And compliance has to be organised so it makes sure customers get the FCA’s ‘fair outcomes’, but doesn’t become such a burden that it stifles growth. It’s also quite a feat to make sure that when new regulations come along, they don’t simply add extra layers of complexity to your systems, organisational structure, ways of working and lines of accountability.

To pull off that feat, you need to take a step back and redesign your compliance arrangements that are embedded in your core business processes.

Balancing costs

You should also look at ways of improving the management information that compliance produces. Focus not just on its quality but also how easy it is to combine it with data from other sources. These things, along with global and regional strategies, will help you make your compliance structure more efficient, effective and robust. Compliance costs more these days, but nowhere near as much as its absence.

Case study – a new compliance function

A global bank decided it needed to respond to the creation of the UK’s new Financial Conduct Authority and Prudential Regulation Authority. It wanted to approach compliance from the point of view of its people’s conduct. So they brought us in to help build a new independent compliance function as a second line of defence.

First we looked at best practice, both inside the bank and among its competitors. That helped us define what the new function should look like and put together a strategy for creating it. We made sure people in the bank who’d be affected by the new function had a say in how it would work. Then, as we got it up and running, our change-management experts helped people adapt to the new model with as little disruption as possible.

It means the bank fits in with the new regulators’ expectations, and regulates people’s conduct without tripping them up.

Contact us

Richard Smith

Capital markets

Tel: +44 (0)207 213 4705

Jim Bichard

Insurance Leader

Tel: +44 (0) 7841 562 560

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