Regulations are important to make societies and economies function properly. When the competition is the biggest force moving businesses, regulations are actually pushing all the players to play the game fairly. The environment created by regulations is not only beneficial for the consumers but also for the businesses. They invest in technologies that can improve quality and increase demands as prices are kept under control. Though businesses have to bear the cost of regulatory burden, regulations do help by discouraging business malpractices and enabling competition.
Take the finance sector as an example. Adding a new regulation can increase the burden of compliance and regulatory monitoring, it can protect the consumer and the business as the regulations are established because something went wrong in the first place.
As non-compliance can hurt societies, economies, consumers and businesses, regulatory compliance undergoes strict scrutiny. For this reason, regulatory monitoring is not an ordinary man’s cup of tea. Almost all financial institutions are regulated. They have to be very effective while putting policies and procedures in place. This will help them in responding to their exposure to risk and mitigate those risks. When an institution fails to do so, consequences come in the form of substantial monetary penalties.
So, an organization needs focus, time and resources to ensure continuous vigilance. As regulatory demands are increasing, ensuring regulatory compliance and regulatory monitoring becomes an urgency. The organization has to establish a culture of compliance.
How To Create A Culture Of Compliance?
When you are building a culture of regulatory compliance, you need to embed compliance in all areas of your organization. It is a continuous process. First of all, you need to define a framework for your organization. You will shape your compliance culture around this framework. This provides every employee with a clear sense of purpose. They should be certain of what is expected from them and how they can help in achieving the end goal. An organization can call regulatory compliance a part of its culture if it is considered at every stage of every business process. There should be compliance officers well-informed on the latest regulations. Their job is to help colleagues in understanding the role they can play to meet the compliance needs of the organization. You have to consider compliance from beginning to end of the project lifecycle. It should be a part of the process from planning and strategy to delivery and reporting. It is not possible to instill this directive within operations without backing from the top management. Compliance-focused culture is not possible when there is a lack of demonstrable support from the top.
However, this culture works only when compliance officers gain a full understanding of what regulators are expecting. This is not easy as the regulatory environment evolves constantly. It can become problematic for multi-jurisdictional financial institutions. It is not easy to stay up-to-date with these many regulations and at the same time, focus on the core business. This is where a financial services institution can take advantage of a regulatory monitoring services provider that is specialized in this area.