Compliance monitoring and testing enables organizations to detect potential issues and vulnerabilities in the risk and compliance management framework of the organization. The first step is to test all the controls that have been put in place. The ideal approach is to continuously test the controls as well to ensure that they are performing adequately.

This entails looking at all the compliance risk related controls and policies that are active within the organization and reassessing their performance. This is a complex undertaking that requires the whole organization to collaborate by providing information and answering questions. The complexity is also why this practice can be daunting for organizations.

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Administrative Overhead

The administrative overhead of compliance monitoring and testing processes is challenging when the process and tasks are performed manually. A look at the workflow shines a light on how difficult the process can become for risk and compliance teams. The teams first must send out a questionnaire about compliance policies and potential risks to all the important stakeholders in different departments. They must keep a record of all the people they send the questionnaires and they follow up with people who did not reply.

All this information is usually stored in a spreadsheet. As the responses start coming in, risk and compliance teams must manually update the spreadsheet. Once all the required answers have been received, the teams must then go through all the documents individually and then assess whether more information is required. They will then be sent an email with the follow-up questions. The teams must then also compile all the answers and any exceptions found in the assessment. A report created from this assessment is then presented to management, which then decides what action to take for the detected issues. The risk and compliance teams must formulate a plan to implement the recommended actions and then monitor the implementation of the recommended actions. Once the changes have been implemented the test needs to be run again to determine whether the issue is now resolved or not.

In a mid-sized financial organization this can mean sending out and then collecting hundreds of documents and then managing all the documentation through spreadsheets. Adding up the initial email sent, the follow-ups, the survey collection, and all other communication can mean hundreds of emails. This task takes a lot of time and dedication, which limits the usefulness of compliance monitoring and testing.

Compliance management technology has emerged as a pivotal solution to help businesses ensure that the process can be performed in a sustainable manner. Click To Tweet

Increasing Effectiveness of Monitoring and Testing

Compliance monitoring and testing is not optional for businesses in the financial sector, which is why it is practiced in all such businesses. The main problem with the current state of monitoring and testing in compliance is that the resources required to carry out the testing and monitoring processes limit the amount of both that organizations can do in a calendar year. Monitoring and testing both provide the organization with data that sheds light on issues and highlights vulnerabilities. The more data that businesses can generate from compliance and testing, the more effective they will be in uncovering problems.
Financial organizations are thus looking for solutions that help increase the frequency of testing and monitoring activities without overwhelming the compliance teams and other organizational resources.

How Technology is Simplifying Monitoring and Testing

Compliance management technology has emerged as a pivotal solution to help businesses ensure that the process can be performed in a sustainable manner. Compliance monitoring and testing solutions streamline the workflow, making it easier for all parties involved.

The process begins on the compliance management platform, with the compliance and risk teams creating a template that can be sent out to all registered stakeholders. The stakeholders fill the form and attach documents back on the platform. Manual spreadsheets can be replaced with software that automatically collects and tracks questionnaire responses. There is no need to send out emails either – all the communication can be handled within the platform. Reminders and notifications are automatically sent to parties who have overdue tasks and actions. Assessment is simplified as the solution displays all the responses through intuitive dashboards. Follow-up questions can be added within the platform as well.


Compliance Management Software

The biggest difference can be seen in how the issues are resolved. Management can assign action items directly from the dashboard that is displaying them the results of the assessment. The progress of all the actions can be monitored within the platform, giving management an enterprise-wide view of how issues are resolved.

Today’s advanced solutions eliminate most of the administrative labor associated with manual compliance monitoring and testing, enabling organizations to make it a continuous process that can be performed more routinely. Interested in seeing how your organization can streamline compliance monitoring and testing? Get in touch with our compliance experts for a demo of the Predict360 Compliance Monitoring & Testing tool.