Air-tight compliance regulations are a challenge for financial organizations in the banking, financial services, and insurance (BFSI) industry in multiple ways and have made it challenging for them to execute their operations. Institutions in the financial industry that adhere to compliance regulations get a competitive edge in the industry.
Compliance risks and threats are growing concerns for the workforce in financial institutions. As the charges for regulatory fines have tremendously increased compared to the bank’s earnings and credit losses, it has become even more significant for financial institutions to improve their compliance adherence. Moreover, non-compliance with the rules and regulations might have a negative brand image which hampers the user experience. Finance business leaders need to consider compliance management as one of their top priorities to ensure smooth operations and avoid any legal charges.
Here are a few ways that finance business leaders can consider to manage compliance efficiently:
Create a compliance risks roadmap
It is essential for businesses to create an efficient roadmap of the compliance risk and maintain a regulatory inventory for all the valuable artifacts. Banking, financial services, and insurance businesses that take this approach need to determine which process, control, regulations, and training that will be hampered in case of an emergency. Finance business leaders need to evaluate and determine if they have any existing resources that they can leverage to strengthen compliance management or do they need additional support from third-party experts or consultants. Creating a compliance roadmap for businesses in the banking, financial services, and the insurance industry will help them to evaluate the risk and take necessary actions to prevent their organization from various legal threats.
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Hire resources to identify and categorize regulatory risks
Along with the internal surveys, it is crucial for financial businesses to brainstorm sessions and evaluate the current risks. Financial institutions can partner with external resources to compare their compliance risks and threats with the competitors and consult with the best practices in the industry. It is crucial for the banking, financial services, and insurance industry to have excellent processes set and ensure that they have a real-time understanding of the current compliance scenario happening in the industry. Moreover, financial organizations need to have a clear understanding of what is crucial for the regulators and what legal risks the business has. Business leaders also need to evaluate the possibilities of tweaks in the regulation in the future to make strategic changes. Institutions that are not able to see the correlation between compliance and other various threats and risks across various categories find it challenging to understand how compliance risks and threats affect their business.
Modernize their FinTech stack to evaluate regulatory changes more quickly and efficiently
Regulatory bodies around the world are evolving their rules and regulations to strengthen users’ rights and privacy. However, it can be a challenging task for businesses in the banking, financial services, and insurance industry to keep track of all the updates and enforce them into their operations to ensure compliance adherence.
Business leaders in this sector can upgrade their FinTech stack, which enables them to streamline their compliance management by filtering feeds that offer them targeted notifications and effective workflows.
FinTech stack that is capable of filtering the notifications help the business leaders to determine and process exceptions without requiring them to go through a bunch of newsletters and bulletins and quickly identify the high-priority aspects. Once the leaders have filtered notifications, they can execute additional risk assessments and create tracking and analyzing schedules for the regulatory changes that are critical and have a tremendous impact on the business operations or broad strategy.
Banking, financial services, and insurance industry veterans can consider these strategies to strengthen their compliance adherence.
