At the upcoming Annual Financial Services Risk & Compliance Conference in London this April, delegates will be asked to pause in their busy workloads and contemplate what they need to do to stay ahead of an expanding regulatory agenda.
It’s a question very much driven by the creeping thicket of regulation, made ever more complex by the need to understand transnational rule variations, align with rules governing adjacent regulated sectors and decipher endless reports from international bodies and pressure groups. Each of these myriad thorny stems must be traversed with care and diligence.
Yet, while company Boards have always interrogated risk, they are increasingly aware that human capacity alone cannot manage this level of entanglement. They recognise that when rules overlap and interact exponentially, managing compliance through manual review or fragmented systems creates serious, hidden liabilities.
Consequently, the Board’s questioning has evolved from the transactional, “Have we implemented the latest regulatory update?” to something much sharper: “Given the exponential interaction of our domestic and international obligations, where are the gaps in our implementation? What is the evidence for our resilience, and if the regulator walked in tomorrow, could we prove that our filters and decision-making processes actually protect the firm?”
To put it succinctly, the core tension facing many heads of compliance today is the gap between the data they hold (activity) and the answers the Board needs (exposure).
However, this shift from “are we compliant?” to “where are we exposed?” is proving challenging for many legacy systems and manual frameworks. If your reporting system forces you into a narrow focus on the volume of work done rather than the effectiveness of your company’s and customers’ outcomes, then it might just be possible that you’re attempting to answer a question the Board is no longer asking.
Moving from annual to continuous assurance
So, how do we broaden the scope of your performance reporting?
One of the key themes of this year’s conference is ‘navigating regulatory change with confidence’. To do this without yielding to compliance fatigue, firms need to move away from quarterly and annual reporting – and fraught scrambles to collate data before Board meetings – towards continuous monitoring.
That’s because Boards now require insights that are decision-ready. Leaders need to know that if a specific risk indicator turns red, the system and the people overseeing it know exactly why, and most importantly, what is being done about it.
Without a doubt, this is the most effective way to operate in an environment where scrutiny is ongoing throughout the year. Best practice today amounts to the ability not just to trace a Board decision back to the specific data point that informed it, but also to demonstrate that appropriate steps were taken when things went wrong.
Let’s continue the conversation
The challenge of modern compliance is now about much more than clearing individual regulatory hurdles. It has become a fundamental governance issue requiring the translation of a huge volume of regulatory data into clear, actionable management information.
At My Compliance Centre, we are helping firms bridge the gap between manual activity and automated insight, ensuring that when the Board asks searching questions, compliance teams have the right answers ready.
Ben Mason, CEO and founder of My Compliance Centre, will be attending the conference on 29 April and welcomes conversations with compliance professionals about current trends and challenges facing the sector.
If you are looking to evolve your compliance capabilities to sate modern boardrooms’ appetite for rich insights, then a chat with Ben over a coffee might provide food for thought. To set up a meeting, contact Ben here: ben.mason@mycompliancecentre.com
