Compliance Lifecycle

Reform, Comply, Report. STOP!!!!

Implementing some form of Regulatory Reform & Compliance Management in an organization could be as simple as the title indicates but rarely is, nor should it be. Quite the opposite, in recent years governing bodies and shareholders have been demanding increased accountability and management transparency resulting in a progressively more complex regulatory environment.

While regulations are imposed to mitigate operational failures, compliance's function is to mitigate operational risk. The need to abate operational failure and risk demands that Regulatory Reform & Compliance Life Cycle Management become a tactical component of an organizational risk management strategy. Many companies fail to ensure compliance by relegating it to a function of operational reporting solely. This tactic ignores the importance of executive leadership backing, accountability and reporting which play key roles in the implementation of successful compliance strategies. For companies that have traditionally thought of compliance as an operational reporting capability, organizational change management processes will be required to help employees embrace compliance as an enterprise-level initiative.

In order to properly manage compliance risk through Compliance Lifecycle Management (CLM) numerous disciplines need to come together to form a rigorous process for identification, decision-making, and taking action.

The Strategies of Regulatory Reform & Compliance Management

Within the Compliance Lifecycle framework are several core strategies that demonstrate transparency and accountability to governing bodies and shareholders.

Tactics of Compliance Lifecycle Management

Within the Compliance Lifecycle framework are several core strategies with accompanying tactics that demonstrate transparency and accountability.

Conclusions

In enterprises large or small, Compliance Lifecycle Management faces many challenges both internally and externally and numerous questions need to be answered.

For example:

  • How do we measure our risk tolerance?
  • Who should be responsible for managing and monitoring system risk? What should their authority be?
  • Is the organization ready for change?
  • How should regulatory monitoring systems be designed and built?
  • Are your due diligence systems ready to respond?
  • Are your compliance monitoring systems ready for the changes
  • How many manual touch points does your compliance monitoring system have?
  • Have you established a compliance review board, processes and procedures?

In today's global marketplace, financial organizations have greatly expanded the scope and complexity of their activities and face an ever changing and increasingly complex regulatory environment. There is no generic one-size fits all solution--a reusable maintainable Regulatory Reform & Compliance Management framework needs to be in place no matter the size or scope of the compliance project.

Keeping in mind that a single compliance failure can result in litigation, financial penalties, regulatory constraints, and reputational damage that can strategically affect an organization for decades, it is of the utmost importance that firms proactively manage these risks before they materialize.