What is compliance Management?
In the financial service and banking industry, heavy regulations are placed upon the firms to uphold market integrity, user and consumer protection, and security all around. Compliance Management is the practice of ensuring the company is compliant with all of the regulations and directives you need to comply with and adhere to.
Compliance Management is an ever-changing game and an ongoing process of always keeping on top of regulators and the responsibilities you as a bank or other financial institutions are required to comply with.
Why is compliance management important?
As a regulated firm, you have pressure from all angles.
- Governmental and international authorities are putting regulations and legislations on firms for them to comply with.
- The users are requiring a certain level of safety.
- The constant threat from fraudsters is always imminent.
Compliance management is important based on all three reasons and factors. Compliance Management helps you lock all necessary locks and make sure you adhere to regulations, laws, legislations, and rules. Read more about the consequences further down.
The compliance threats towards a non-compliant company
Here we are talking about the possibilities a fraudster and criminal has to pose any threat towards a non-compliant company and the damage they can do.
A fraudster can engage in a lot of activities to harm a company or organization, which does not have the proper compliance management in place.
Here are some of them:
- Market Abuse
- Information Handling
- Employee Misconduct
- First-party fraud
- Second-party fraud
- Third-party Fraud
- Internal Fraud
- Anti-Money Laundering
- Counter-terrorism financing
- Identity theft
And many, many more.
How to overcome the threats towards compliance management
You obviously need to hire staff to oversee this area and know where and how to look for threats and potential breaches.
Compliance Management sofware
No human staff can do this alone in today’s world. You need to have software implemented to make sure your company stays compliant.
Do yourself and the company you represent a favor and set up processes and procedures for whistleblowing. If a customer, business partner, or even an employee detects something non-compliant, then that person should have the possibility to blow the whistle anonymously.
What is a compliance manager / compliance officer
A compliance manager or compliance officer, as they are just as often referred to, is the employee at a company who is responsible for overseeing, detecting, and reporting on non-compliant behavior, and also delivering on requests from the authorities in regards to investigations.
They are the ethical and legal safeguards of a business.
The consequences of not managing the compliance
The consequences of being non-compliant and not managing the compliance properly can be severe and devastating in some cases.
From the authorities’ side, a non-compliant firm faces penalties and compensation, which can have a great financial and reputational impact on the business.
Also, by not managing the compliance you expose your business and customers/users to the threat from fraudsters and criminals and leave everyone vulnerable.
Compliance Management software and tools
What the right Compliance Management setup can do for your business
A non-compliant company is like a leaking dam. at one point everything will come flushing out, if not attended to.
CEO, TM Group
We have developed this compliance dictionary to give you a reference work you can bookmark, and always return to, when you come across a compliance term relevant to the EU or UK market, and don’t know what it is. It is constantly under development, and we encourage you to reach out to us if you were not able to find the term you were looking for.
Let's get in touch
Emil has a long and extensive experience in working with compliance management in heavily regulated firms and entire industries.
If you have any questions regarding compliance for your business, don’t hesitate to contact Emil.