Why systemising your approach will build stronger governance

A retrospective look at SM&CR in the UK has revealed some important learnings for other jurisdictions getting ready to adapt their regulatory processes. One of the main lessons highlighted is that organisations should not delay in systemising their approach.

As Ireland’s Individual Accountability Framework (IAF) Bill summer release date approaches, financial entities should look to the UK as an example. Their experience shows us why proactively digitalising the implementation process for IAF and SEAR can help organisations to adapt to this wave of regulation more efficiently – as well as reap the long-term rewards of a solid framework.

The downfalls of delaying systemisation for new regimes 

Many UK organisations chose not to systemise their compliance early on because they weren’t aware of the relevant solutions, they didn’t anticipate the size of project ahead of them, or simply because they believed their established manual processes would suffice.

Over the past few years, these organisations have experienced the difficulties of attempting to transform their compliance processes on paper and the consequences that they have now been left with. Some of the main consequences that have been revealed include:

  • Cost: Organisations dedicated significant cost to hiring consultants to support the implementation of the new regime. Now that they’re taking on a digital solution, they’re spending more money to transfer all the data, processes, accountabilities and more.
  • Infrastructure: Many organisations completed their ‘on paper’ implementation only to discover that their teams weren’t equipped to manage the operational changes without technological support. The relevant resources and processes weren’t put in place to underpin business and usual functions.
  • Risk: With everyday operations not running smoothly, the risk of human error and breach of conduct rules increases. This not only has a knock-on effect on all processes, but it puts your people in a difficult position, threatening consequences such as fines and both criminal and civil prosecution. Equally, the lack of flexibility in manual approaches makes it more difficult to adapt and comply with any future changes.

The clarity of hindsight unfortunately shows that these organisations have simply kicked the can down the road, with many now starting to shift to a new system. As a result, entities are running two systems simultaneously, making it a slower and more challenging process than if it had been completed upfront.

Instead, if they’d chosen to systemise upfront, they would not only now have a fully digitalised compliance infrastructure, but they would have had the technological support of automation, templated workflows and frameworks, recorded conduct capabilities and more to help streamline their implementation process.

The benefits of systemising during implementation, not after 

Systemisation is so much more than an operational benefit; it’s a regulatory necessity. Digital transformation offers a huge suite of benefits for your every day, but this all contributes towards the bigger picture of empowering individual regulatory compliance. By improving accountability, transparency, and compliance across your entire corporate structure, you will more confidently secure corporate governance.

This is the primary reason it’s important not to wait until after implementation to systemise your solution, but there is a long list of other valuable benefits.

Single source of individual compliance truth 

Systemising early on means organisations can avoid the pitfall of running two systems simultaneously. Work isn’t spread across Excel, SharePoint, and people’s personal documents. Which as a result, reduces the risk of siloes, human error, and missing data, along with the administrative inconvenience of managing work across solutions.

With digital versioning and record keeping tools available to you from the beginning of your regulatory shift, all your implementation actions will be canonically preserved and accessible within a single centralised solution from day one.

Systemising all requirements at the same time, in the same system, also means organisations can clearly differentiate between the existing and new regulation.  Clearly recording the changes in Fitness and Probity (F&P), for example, makes it much simpler to identify and meet requirements.

Built-in capabilities and support 

With a digital solution, many of the capabilities or requirements you need will already be built in and organisations can begin preparing critical documentation, frameworks or workflows ahead of implementation. Plus, you can start to see potential outputs from a much earlier stage, which gives you the time to assure, assess, and adapt accordingly.

For example, Trailight is designed with a baseline of essential data, structures and templates already embedded into the system. It includes pre-established statements of responsibility and frameworks for accountability mapping that our customer success team will support you to complete.

Essentially, you can start working on an already solid foundation and save on huge amounts of time-consuming tasks. Our consultants work closely with financial organisations to review their processes, configure the solution to their needs, and make the implementation journey as smooth as possible.

Regulatory efficiency and accountability 

Digital transformation with the right solution will create operational efficiencies, resource savings, and reduced risk – during and after implementation. Starting with infrastructure building means all the critical requirements are secured upfront and labour-intensive tasks are removed. Senior management can focus on what’s most important to them and what regulators want to see, such as cultural change and corporate transparency, rather than the nitty gritty.

These benefits come from a large number of features, including digital communication with senior executives, documentation repositories for regulated staff members, and automated workflows.

However, the standout features for reducing risk and building posterity are digital versioning and fingerprinting. They allow organisations to see a view of the world at a certain time by keeping detailed records of activity. With a comprehensive timeline of actions and accountability for every task or document, organisations can evidence compliance for any issue.

Trailight, for example, leverages these features to display the context of the situation, who was responsible, when it all happened, the decisions that were made, and much more, in an instant. Without systemisation, this would need to be manually recreated by searching through Excel, emails, and any number of other tools.

Agility and flexibility 

Change is inevitable in financial regulatory markets. The UK’s implementation of SM&CR is a perfect example of how the consultation process can drag out, producing multiple iterations of guidelines. If implementing on paper, it’s almost impossible to maintain pace with these changes meaning most of your work becomes redundant. In contrast, systemising gives you the flexibility to pivot quickly and with efficiency.

A digital solution will enable organisations to change their processes in accordance with new regulation within the required time frames and keep individual compliance, such as F&P, up to date much more easily.

Moreover, this is a resilient, forward-looking approach which will help you manage any future regimes or regulatory changes – an inevitability for any financial entity.

Systemising with Trailight 

Trailight’s approach to systemisation provides three essential benefits: expert consultation, onboarding support and future-proofed digitalisation.

As embedded infrastructures and cultural change are more heavily emphasised in the IAF Bill and SEAR, it’s more important than ever to systemise your regulatory approach. Trailight will partner with you to not only support your implementation, but also build your post-implementation world.

Systemisation through Trailight allows you to expand your strategic perspective and look beyond the horizon. Purpose-built to address the challenges of the financial regulatory world and supported by a human-centric customer success approach, you can manage your individual accountability and people-focused compliance more efficiently, at a global scale.

Begin building your more transparent workplace, starting today rather than tomorrow. Get in touch with our team about your systemisation needs at 01904206066 or [email protected]