Leading the Front Line of Defense in Compliance as a Compliance Manager

Posted by: Christine Thomas

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When it comes to compliance, there is no such thing as too many precautionary measures. Even the smallest compliance failures can turn into huge headaches for the organization; punitive damages and reputational loss are only the beginning of issues a compliance failure can cause. The best way to improve the levels of regulatory compliance within the organization is to improve the first line of defense ; the front line that actually deals with business operations. The problem is that the relationship between the compliance manager and the front line is often not very amicable.

It Is very easy to see why this is so; for the front line the compliance manager is someone in charge of catching their mistakes. They usually interact with the compliance manager only if they have made a mistake or failed to highlight a compliance issue. This leads to an organizational dynamic where people do not work with the compliance department; instead they work in a way that helps them avoid having to interact with the compliance department. The regulatory compliance manager should be the one leading the charge in improving front line compliance but instead ends up being the one that the front line avoids.

This is a major issue for organizations for one very simple reason; this has an adverse effect on the compliance practices within the organization. Compliance improvement needs enthusiastic employees who listen to the compliance manager and improve their work.

Rethinking the relationship between the front line and the compliance department

If we want the front line to get serious about regulatory compliance, we need to improve the relationship between the compliance department and the front line. There are several things that need to be done to change the way they interact.

Making compliance accessible

A major reason that compliance is often an afterthought for the front line is how inaccessible it is. The front line knows what they are supposed to do for compliance reasons, but they often don’t know why they need to do it. Compliance is a complicated area and expecting the front line to know it completely is unreasonable. The solution is to make compliance accessible for the front line. They need to have a system they can consult if they are unsure about something.

Making the compliance manager a consultant

The best way to change the dynamics of the relationship between the compliance manager and the front line is to reframe the compliance manager as a consultant for the front line. This means that there needs to be someone in the compliance department available to help the front line when needed. This does not mean there needs to be someone from the compliance department on the front line (though that would help too) but that there needs to be a channel of communication for the front line when they need help regarding regulatory compliance.

Automating compliance functions

Another important step is to automate as many compliance functions as possible, because it changes the dynamic between the compliance department and the front line. Think of the same situation in these two scenarios, one with GRC (Governance, risk, and compliance) automation, and one without:

  1. Some important information is missing from the KYC files. The front line was responsible for the these files. The issue is discovered in an audit a month later by the compliance department. They call in the people responsible and tell them about the issue. This whole scenario ends with the people responsible getting a reprimand for not doing their work properly. The front line ends up feeling that they were ‘’caught’’ by the compliance department, something they need to avoid in the future.
  2. Some important information is missing from the KYC files. Since a GRC system was in place to automate compliance function, the system immediately flags the issue. The compliance department immediately contacts the person responsible at the front line, and they are able to get the missing information from the customer instantly. The front line person responsible thanks the compliance department and no one needs to feel reprimanded.

For the compliance manager to become a true compliance leader for the front line, they need the right tools, the right frameworks, and the right channels of communication. Regulatory compliance is not easy to achieve, and it needs as much coordination within the organization as possible. Bringing the compliance department and the front line on the same page through a GRC framework is the best way to ensure that the whole organization plays their part.

If you want to see what such a system can do for your organization, get in touch with us and we will arrange a live demo of Predict360 for you. Want to explore Predict360 yourself and see how it will benefit your compliance workflow? Get in touch with us and start your 30-day free trial.

About the company

360factors, Inc. (Austin, TX) helps companies improve business performance by reducing risk and ensuring compliance. Predict360, its flagship software product, vertically integrates regulations and requirements, policies and procedures management, risks and controls, audit management and inspections, and on-line training and qualifications, in a single cloud-based platform based on artificial intelligence.

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