Compliance is complicated and expensive to manage – often made more so by the very tools and processes intended to get the job done.
Many compliance teams struggle with clunky, outgrown technology, inefficient processes and significant time can be spent manually creating and amending reports for the board. That’s a lot of time that could probably be spent more productively.
Here are five of the most common challenges to effective compliance management:
1. Siloed functions
Compliance processes are often created in response to a specific event – a new regulation, litigation, criminal investigation, and so on – with little thought as to how it all works together. When responsibilities are separated in this way, few people have the means, motivation, or opportunity to easily share information across functional lines.
2. Disconnected systems
When compliance responsibilities are confined in silos, chances are that the technology used to carry out those responsibilities is just as disconnected. That makes it very difficult to efficiently manage compliance across multiple business lines, functions, or locations. And with no easy way to exchange data, multiple people end up chasing down the same information.
3. Manual processes
Managing compliance via spreadsheets, shared files, and documents probably made sense at one time. But these tools were simply not designed to keep up with a sea of constantly changing regulations. It can take hours upon hours to manually update every spreadsheet in every location to accommodate a single regulatory change. Multiply that by the hundreds of regulatory changes that happen in real life, and you have a problem. Every piece of data that must be updated or copied and pasted also opens the door to more human errors.
4. Incomplete – or nonexistent – metrics
Cobbling together information from multiple disparate systems – often by hand – into meaningful reports is a time-consuming, error-prone process. By the time a report is finally assembled, it’s likely to be out of date. And without the help of sophisticated analytics to calculate potential risk and prioritise efforts, you are left managing compliance largely through a lens only able to focus on the past, not the future.
5. No visibility
Without an integrated view of compliance-related activities, it’s nearly impossible to identify gaps and inconsistencies in how compliance is tracked and managed. That means a damaging risk can easily slip by undetected or unaddressed because you couldn’t gauge the full impact until it was too late.
Add Covid-19 into the mix
Covid-19 has created an enormous amount of business and regulatory disruption in a short space of time and compliance teams, like other functions at most financial institutions, are now fully consumed with managing the day-to-day impact of the crisis.
When businesses are finally in a position to return to business as usual - there will certainly be detailed evaluations of the biggest challenges faced by compliance in high pressure circumstances like these.
Covid-19 aside, there is increasing pressure on compliance to be demonstrating effective performance across many different areas – from incident management to policy management and not to mention keeping on top of ever-changing rules and regulations. The recent implementation of the Senior Managers and Certification Regime (SMCR) has pushed compliance teams further into the limelight.
One thing’s for sure, there’s simply no place to hide in today’s connected world – which makes effective compliance management more critical than ever. Identifying your biggest compliance challenges is the first step toward overcoming them. This might just provide you with just the fuel you need to instigate crucial changes required to improve overall efficiency and make your life easier.
The challenges of effective compliance can be overcome to a large extent with the implementation of enterprise compliance management system, helping you to centralise and streamline all compliance activity and processes.