How to Create, Track and Manage Your Compliance Monitoring Programme

All compliance professionals working in the UK’s financial services industry understand how important it is to achieve full FCA compliance. Maintaining compliance is good for your partners and customers, and protects the business itself from reputational and financial risk. It also helps the industry as a whole to avoid a ‘race to the bottom’ scenario.

That is all well and good, but it leaves business owners and stakeholders trying to comply with thousands of different regulations, some of which seem to change daily. An effective Compliance Monitoring Programme (CMP) is an important part of avoiding costly accidental regulatory breaches.

But what makes a ‘good’ CMP? The FCA says that your programme must ‘…be tailored to your business, and take into account the types of regulated activity your firm intends to carry out.’

The starting point is to define your key regulatory risks. You must then build a testing programme around those needs. After testing, you need to remediate any failings identified. As you will no doubt have noticed, this is a cumbersome and time-consuming process to achieve using Excel and Outlook. Worse, that approach is prone to errors.

In this article, we’ll provide an executive-level overview of setting up and running a truly professional compliance monitoring programme.

‘What makes My Compliance Centre an expert?’, you may ask. We provide fully automated compliance management systems for companies just like yours on a regular basis – and we can implement one for you.

Creating a Compliance Monitoring Programme

If you need to set up a new CMP – or repair an existing programme that is simply not fit for purpose – you may want to start with a 4-step system like the one outlined below.

Begin with a regulatory compliance audit.

You’ll need to accurately assess your key compliance risks as well as the effectiveness of your existing compliance protocols. Examine each in depth. Compare actual day-to-day practice with the documentation.

The simple fact is that, if the programme has been around for a long time, you might need to be prepared to update it with new, emerging risks or updated testing methodologies.

Automate the process of monitoring for regulatory changes

It is very difficult to manually stay on top of everything the FCA, and other regulators, say. An effective and efficient horizon scanning process (such as My Compliance Centre’s Regulatory Change Management module) is critical. Thai will enable you to identify changes to your risk profile caused by the FCA’s activities and keep your Monitoring Programme up to date.

Ensure your Monitoring Processes are Proportionate

Monitoring and testing activities should reflect the level of inherent risk within any given business activity. There is no point monitoring low risk activities too frequently or in too much detail at the expense of higher risk activities.

Create compliance reporting processes you can rely upon

A good reporting system will assist all stakeholders – the compliance team, the board and risk committee and the rest of the business.

Your reporting should identify which risks are most likely to crystallise, trends in your monitoring results, where remediation is not being carried out or not effective and so on.

Make no mistake, creating a programme like this from nothing is a job for skilled compliance professionals. Our solution streamlines the administration process, allowing you to focus on testing, remediating and reporting.

We offer fully automated solutions for:

Just click on any of the links above to learn more.

Managing Your Compliance Monitoring Programme

No matter how fully automated your compliance management programme is, you need to keep a hand in to ensure that it remains effective.

Ideally, testing and monitoring are an integral part of the system, not an add-on or an afterthought. These should be carried out religiously and in depth. You should never be ‘just ticking the boxes’. A senior manager or board member needs to be actively involved, ensuring that the procedures you’ve created are being used appropriately and effectively, that any problems are being detected and reported, and that remedial actions actually occur in a timely manner.

Proactive management of the programme will also provide side benefits, such as being able to demonstrate your involvement and insight into the programme to regulators, board members and stakeholders.

In the end, you need to ensure that your compliance monitoring programme is specific to the way you do business, sensitive enough to spot problems early, automated enough to allow your compliance team to excel at using their human faculties to oversee the system, and robust enough to actually bring problems to your attention.

Of course, every business is unique, and faces its own regulatory challenges. We would love to discuss your unique business situation and the compliance management challenges it creates. We would also like the opportunity to show what some of our automated solutions could do for you, when properly implemented. Our CMP solution is the perfect choice for: