Philosophy has the virtue of being applicable everywhere – from our personal lives to our professional endeavors. There are philosophies which provide excellent insights into what bankers can do to maximize their success during different situations. Wu Wei is an important part of Confucianism and banks who understand the concept will be able to reap the benefits.

What Wu Wei Means

Wu Wei is often translated as ‘’doing nothing’’ or ‘’inaction’’ – which may sound very bad for a philosophy that banks should follow – but this is a misconception about what Wu Wei means. Most philosophies are about what a person or society should do in a situation, while Wu Wei tells us that it is possible to achieve our goals without taking any action, as long as we are in the right place at the right time.

Complimentary Webinar - Identify Critical Gaps in Your Risk and Controls While Fast Tracking Risk Management with 360factors and Crowe, LLP: ABA Endorsed Solution Providers

The way planets orbit around the sun is a great example of Wu Wei. Earth (or any of the other planets in the solar system) do not have to do anything to orbit the sun – they are in the perfect position to gravitate around the sun without drifting away or falling into Sol, our sun. This, even though they do not actively take any action, they continue orbiting the sun day after day.

Wu Wei posits the same philosophy for people. It says that positioning oneself in the right place will allow people to achieve what they want without exerting any particular action – or, in other words, instead of focusing on the objectives, people should focus on being in the place and time and with the right preparation to be able to achieve the objectives that they want.

People who play or watch sports will be able to understand how important Wu Wei is as a concept – it isn’t enough for a player to have the right skills – they also need to be at the right place to make an interception or start a play. That is why coaches focus so much on drills and placement of the players.

What Wu Wei Means for Financial Compliance

Banks and other financial organizations are often seeking to improve compliance management processes. Lapses in compliance management can result in monetary and reputational losses for banks. A common approach is to add more compliance oversight or to hire additional compliance practitioners. The management wants to take actions that can directly increase compliance levels across the organization. In most cases such efforts result in a temporary increase in performance levels but as the management’s involvement fades and they begin focusing on something else, the performance goes back to what it was before.

Wu Wei provides a better approach to compliance – instead of focusing on the compliance actions and activities, banks will be better services by positioning themselves to promote compliance. Click To Tweet

Wu Wei provides a better approach to compliance – instead of focusing on the compliance actions and activities, banks will be better serviced by positioning themselves to promote compliance. This means that instead of increasing the headcount in the compliance management department, financial organizations should also consider infrastructure level changes that ensure that compliance levels are maintained throughout the enterprise with greater efficiencies.

Compliance Infrastructure Upgrades

Upgrading the compliance infrastructure of a bank has a much more profound effect on compliance levels and the effect is permanent. Think about how unorganized compliance can be when handled manually. Important compliance information is spread out in thousands of different documents and spreadsheets. Critical discussions about compliance activities are present in different email threads across different inboxes within the organization. Compliance teams have to meticulously keep manual records of important activities. Compliance lapses in such a situation are not because the compliance team made a mistake – the lapses occur because the bank’s position in terms of compliance was not right.

Think about how different compliance management looks when a compliance platform is being used. All the information is stored within the compliance platform, making sure that it is easily accessible whenever required. All the discussions are on the same platform, enabling banks to open any issue and not just see what decision was taken but also see the discussion that led to that decision being taken. There is also no need to keep manual records, as there are electronic audit trails for all the actions that have been taken.

There is also a shift in the way the organization approaches compliance. Modern compliance applications monitor the compliance framework and notify assigned stakeholders when irregularities are detected. This provides compliance teams with a real-time view of enterprise-wide compliance, putting them in the right position to intervene and minimize potential compliance-related issues.

Compliance Management Software

Wu Wei is something that compliance managers should focus on – instead of simply recommending specific compliance actions, it is important for banks to also be in the right position to ensure compliance using minimal resources.

Interested in seeing how your bank can improve enterprise-wide compliance with the help of an AI powered platform? Get in touch with our compliance experts for a demonstration of the Predict360 Compliance Management solution that has been endorsed by the American Bankers Association (ABA).