Managing the global pressures of individual compliance and reporting

“The volume and complexity of financial regulations have increased significantly since the 2008 financial crisis. This has put increasing pressure on banks to monitor and report a range of intricate exposures to comply with new prudential requirements.” – Johan von Solms

In the wake of the financial crash, there has been increasingly frequent regulatory change. Characterised by a renewed focus on individual accountability and compliance, this now turbulent environment makes it more difficult for organisations and their individuals to remain up to date with their responsibilities.

Regulators have made changes that impact what is required within individual compliance reporting and management. For example, Covid-19 will have introduced more regulation around remote working, while the introduction of The Consumer Duty has shifted individual requirements to support good consumer outcomes. Or MiFID and MiFID II: as a member of the EU, UK financial services organisations were once required to comply with these directives, but of course this changed in 2020 when the UK left the EU.

While there are some common individual compliance themes that are addressed across jurisdictions, many regulators review and evolve regulation through different processes. For example, the FCA perform thematic reviews and, if an issue is found, deeply evaluate this to identify and rectify the cause. Hence changes like The Consumer Duty.

As a result, there is regular fluctuation in the individual regulatory market which means organisations must continually update their reporting requirements and processes. Adding to this challenge is the traditionally manual, time-consuming and ad hoc nature of performing reporting tasks.

The more frequent and significant industry changes become, the less reasonable it becomes for humans to implement in a timely manner or systemise it long term.

Global reporting for individual compliance

Reporting on individual compliance becomes an even more pressing challenge for organisations that work across borders. It’s necessary to manoeuvre between a focused view on individuals within their entities, and an overarching global view of the entire population behaviour.

However, organisations often don’t have the technological capabilities to accommodate this demand. Plus, despite being shaped by common themes, jurisdiction nuances don’t always support a consolidated data feed.

Without the ability to flexibly manage individual data, silos can easily develop that affect reporting, communication, and technological systems.

Creating one single source of truth

“Integrated adoption would mean the digital platform can be deployed to support both strategic management activities and enhanced regulatory processes” – Johan von Solms

Knowing that adapting is a continuous requirement, organisations should ensure they have a holistic solution which will support them to keep their individual compliance processes up to date. To help with this, a regulatory solution should be:

Comprehensive: Capturing as much individual data as possible is fundamental to effective reporting. A holistic individual compliance solution will enable you to maintain a complete digital footprint that works at both the individual and the population level, despite changing requirements.

Flexible: A solution that can be flexible enough to accommodate changing definitions, regulatory requirements, and shifting frameworks will help your organisation to continuously adapt in line with individual compliance. It’s important to be able to adapt data views for different perspectives, accommodating the needs of specific teams to strategic committees.

Integrated: Breaking down silos will create a fuller, clearer picture of individual risk and trends. Being able to share relevant individual conduct data throughout teams will allow organisations to meet legal requirements and support board-level governance. They can also uncover key issues that may be occurring with individual compliance processes across the organisation.

Focused: Complementary rather than contradictory to the above, a solution should allow you to focus in on different needs. This will allow each individual, department and region to fulfil their individual monitoring requirements.

Global: The more information individuals can capture, the better organisations can consolidate and share data. They can then utilise the resulting analysis of individual compliance activity globally to improve their processes, identify recurring trends (both positive and negative) and understand the source of any issues.

Data and reporting across regions is a key challenge for individual compliance but there are ways organisations can align their processes.

Read more in our Individual Regulatory Compliance for Global Organisations whitepaper.

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