Can effective Compliance be a competitive advantage?

The Regulatory Challenge and the Compliance Solution

The ever-increasing volume, velocity, and range of regulatory changes pose a significant challenge for organizations today. Regulatory change management systems can provide a solution by giving executives and regulators greater visibility into efforts to minimize compliance risk. This transparency is crucial, as regulators seek assurance that organizations are managing changes effectively and that employees clearly understand their roles and responsibilities. Moreover, it can? position compliance as a strategic asset that can contribute to an organization's overall success

Building an Effective Regulatory Change Management System

An auditable and automated process with a focus on planning, identification, and clear, consistent definitions is key to achieving successful regulatory change management.

·?????? Risk Appetite (Identification): Understanding your risk profile is essential. Organizations need to establish a set of criteria to prioritize relevant regulatory content against this profile. This profile should be mapped to specific, material risks within a predefined content taxonomy.

·?????? Common Taxonomy (Definition): Defining clear criteria for content management is a critical first step. A compliance taxonomy that filters content based on geography, sector, content type, themes, and organizations ensures efficient information organization. Mapping this to your internal taxonomies for structure, products, and organization further streamlines the process.

·?????? Roles and Responsibilities (Definition): With rising personal liability and enforcement actions, clear job descriptions and an automated system are crucial. This system should map regulatory changes to relevant policies and controls, allowing teams to easily identify necessary updates and communicate them effectively.

·?????? Staying Current (Planning): Continuous monitoring and analysis of regulatory developments are essential for compliance teams to maintain awareness of the evolving landscape. This allows for proactive planning before changes are implemented.

·?????? Tracking System (Planning): Mapping relevant regulatory actions to related controls and policies is key. An automated system can integrate regulatory change alerts directly into the business workflow, facilitating impact assessments to determine necessary updates. This approach avoids duplicative testing of control requirements critical to multiple regulations.

Compliance as a Strategic Asset

Effectively managing regulations can transform them from burdens into assets.

Building a Strong Compliance Program

Here are seven ways to build an effective compliance program that goes beyond just meeting regulations:

·?????? Metrics: Track the cost of compliance, return on compliance, and return on investment. Compare these metrics with peers to add context. Analyze fines, reputational risk incidents, investigations, risk assessments, policy updates, training completion, and regulatory visit costs.

·?????? Compliance Shareholder Relationship Management (CSRM): Effective programs rely on strong relationships with internal and external stakeholders, including regulators. This includes managing relationships with third-party vendors.

·?????? Change Management: Larger companies need to effectively reach and impact all employees with compliance programs. Adapting these programs to evolving needs is crucial.

·?????? Reduce Compliance Fatigue: Branding your compliance program can elevate its importance and prevent employee disengagement.

·?????? Compliance Standards: Identify the necessary compliance standards and qualifications for your organization, both now and in the future (e.g., ISO 19600).

·?????? Regulatory Responsiveness: Promptly address gaps in compliance programs as identified by regulators.

·?????? Compliance Convergence: Collaboration between anti-money laundering (AML), fraud, and cyber functions is increasingly important. Information sharing among financial institutions can help guard against financial crime.

By implementing these measures, organizations can demonstrate that compliance is a vital partner in navigating both good times and bad.