Compliance is the Only Option (And It’s Especially Easy If You Use Technology) - Traders Magazine

2023-01-30 20:56:33 By : Mr. Neal liu

For a well-run business, compliance is not only required, it is existential. It underpins a healthy culture and reinforces corporate reputation. On the other hand, the cost of non-compliance can run into the billions of dollars, and that’s just the financial impact. Fortunately, advances in technology make running a robust compliance program a whole lot more effective, efficient and economical. As compliance is now a must-do, it is a question of how to use the latest tools to best manage people and operations. Technology can not only increase effectiveness and adherence, but lower costs through scale, processing power, and the digitization of laborious manual processes and checks.

The ability – and willingness – of the C-suite to champion a compliant culture is the essential prerequisite for a robust program. Table stakes for a firm is the appointment of a Chief Compliance Officer and formation of, and reporting to, an executive oversight committee to “own” compliance. Executive-level support is critical to the respect and standing that the compliance program is accorded in the enterprise. That said, executive support alone is not a sufficient condition for the success of a compliance program.  Makeup Mirror With Lights

Compliance is the Only Option (And It’s Especially Easy If You Use Technology) - Traders Magazine

While executives have a degree of latitude in establishing and maintaining compliance programs, the US Federal sentencing guidelines effectively set minimum standards for those programs. Businesses must establish and enforce a set of written policies and procedures across the organization. However, having all the right policies in place and even a strong culture is not enough. Put simply, robust guidelines without training and the processes to monitor enforcement of the rules, along with a mindset to understand them, just won’t cut it today, either with regulators or shareholders. 

Enterprise-wide compliance used to be more challenging in an analog world. The emergence of new and more flexible technologies changes the ground rules and coincides with the development of a digitally native workforce. This generation expects to engage with digital solutions to meet their infrastructure obligations. 

Today’s technology can automate the dissemination and enforcement of a wide range of policies across the firm – from personal trading to mandatory vacation, travel, gifts and entertainment, political donations and beyond. Software platforms use sophisticated algorithms to mirror a firm’s code of conduct. Integration with other internal systems, such as HR and accounting, means that anomalies can be more easily identified. Auditing and reporting also become much easier – and considerably cheaper.

The implementation of third-party SaaS-based compliance solutions to embed these new approaches to compliance generally isn’t onerous. These systems have the benefit of being road-tested, scalable, and usually highly cost-effective compared to home-grown solutions that require frequent maintenance, updating and overhead.

For good actors, tech-enabled solutions are really the only effective way to “democratize” and scale compliance. Deploying a software platform across the enterprise – and implementing the training and ongoing support to understand and use it – reinforces the role of every employee in the firm’s overall compliance, while enabling transparency and consistency. It also reduces costs, errors and inefficiencies compared to a manual approach, while protecting the business against potentially significant fines.

So, what happens with modern compliance technology in place? Compliance becomes embedded into the fabric of an organization. It starts with the C-suite communicating the value of compliance and each employee’s role in it. But it then becomes part of everyday operations and habits. For example, mobile apps make it simple for employees to enter an update about taking a client to lunch or an event. The chore of reporting is streamlined and more accurate with automation. Transparency speaks volumes. Better compliance outcomes reflect the company’s positive culture, and the entire business benefits from a stronger corporate reputation. 

For the modern CEO, the implementation of a compliance program is no longer a labor-intensive and bureaucratic exercise, thanks to the latest technology which makes it especially easy. Instead, it is an opportunity to ensure that their vision for the business is indeed the reality.

Compliance is the Only Option (And It’s Especially Easy If You Use Technology) - Traders Magazine

Acrylic Mirror Stuart Breslow is an independent board member at StarCompliance. He is a prominent senior executive with 30+ years of experience in world-class financial services, consulting, and technology organizations.