How Compliance Teams Can Add Value for Financial Organizations in 2021

It is customary for organizations to assess their performance at the end of the year to identify opportunities to improve their practices. As 2020 ends financial organizations are assessing their compliance management frameworks. While organizations are considering how they can minimize or avoid compliance issues, there are also compliance teams that aim to generate value for the bank by contributing to the growth plans of the organization as well as having a positive effect on the bottom line.

This is an exciting new era for compliance management in the financial sector. Compliance has often been viewed as a cost center for most organizations as businesses do not expect compliance teams to contribute to the growth of the organization directly. However, advancements in compliance technology are rapidly evolving the role that compliance managers can play in an organization. There are several different strategies which compliance teams can employ to provide greater value for the organization.

Improving the Compliance Cost Equation

Small and midsized organizations often struggle with the costs of compliance. The biggest driver of compliance costs has been personnel costs. According to industry surveys of risk and compliance professionals, personnel costs can account for as much as 7/10 of the total compliance costs. This doesn’t happen because businesses are employing too many people in the compliance team. The real reason is simple; compliance is a critical domain which requires experienced and qualified people. In other words, banks know that experienced compliance personnel are worth their weight in gold.

The problem is that this limits the amount of compliance activity that an organization can sustain. Most organizations are only able to create a compliance department which can deal with the expected compliance issues within the organization. In order to start expensive compliance projects that completely reframed the compliance management framework of the organization would require more people than most small to midsize businesses can afford.

However, compliance teams can now use technology to deliver enhance compliance performance without having to increase the size of the compliance team to an unsustainable size. One key advantage of compliance technology is that it automates many labor-intensive administrative tasks. This provides the existing compliance personnel with the opportunity to focus on the big picture and take ownership of higher-level compliance improvement projects.

Small and midsized organizations often struggle with the costs of compliance. The biggest driver of compliance costs has been personnel costs. Click To Tweet

Enabling Growth

Compliance concerns are a major factor whenever a financial organization or a bank wants to expand to a new area. Entering a new geographic area, for example, requires the business to comply with all the regulatory requirements of the new state. This is a huge undertaking depending on the differences between regulatory frameworks of the two states.

Compliance teams in small and midsized financial organizations can enable the organizations to grow by improving the pace and efficiency with which they can comply with a new regulatory framework through regulatory compliance technology. In modern compliance management solutions, businesses can select the regulatory framework of a different jurisdiction with just a few clicks and automatically import all the regulations to the compliance management framework of the organization. The technology can also help parse these new regulatory documents and quickly detect the parts of the business that will be affected by the changes in the regulatory framework.

Ensuring Compliance as the Economy Reopens

Today’s risk and compliance professionals benefit from modern tools to ensure that they can protect not just their own businesses but also the interests of their customers and stakeholders over the next year. Both the compliance and risk domains will play an important role in ensuring that businesses stay safe during these times of change.

As we look to the future, some industries will recover quickly, while others will require more time to recover. For financial organizations, the outlook and internal requirements will differ on the basis of location, size, investments in different industries, the types of clients it caters to, and much more. Financial organizations will thus need dynamic tools that can help them navigate these times.

Compliance technology will play a critical role in helping compliance teams quickly complete terms with new regulatory frameworks, new policies by the government, and new internal requirements by businesses.

If you are wondering how you can help the compliance team in your organization play a bigger role in helping the organization’s bottom line over the next year, then get in touch with our compliance experts to see a demonstration of some technology solutions that can help your compliance team increase its productivity and efficiency.