With the regulatory environment continually evolving, the need for a robust approach to compliance is critical to ensure a firm is meeting its regulatory requirements and managing its regulatory risk. Central to this is a considered, independent and risk-based compliance monitoring methodology; it allows firms to measure their business decisions against the associated risks.
An effective compliance monitoring function should have a deep understanding of its firm’s business model, provide assurance that the firm is complying with applicable regulatory requirements (including the detailed rules, overarching principles for business and legislation) and have the authority to drive change and influence business practice.
Typically, compliance requirements on business processes stem from different sources such as laws, regulations, or guidelines that are often available from different sources. An important task towards compliance monitoring is the interpretation of these requirements as compliance objectives and the subsequent specification as compliance rules or constraints. Critical to the effectiveness of a compliance function, and its ability to execute a robust monitoring programme is the ability to carry out assurance work from a position of independence. The function must be able to identify key risks and manage them in line with the firm’s risk appetite – in a way that both enables the business to meet its objectives and satisfy regulatory expectations.
In today’s challenging regulatory environment, compliance teams need to have deep regulatory knowledge combined with business awareness in order to take a compliant and proportionate approach to risk. Firms’ senior management should therefore ensure their team is adequately resourced, suitably qualified and independent from the business.
The most effective and efficient compliance programs are those that are fully integrated into a broader risk management program. This enables a company to look thoroughly across the portfolio of strategic, operational and other risks to ensure that all risks (and benefits) are considered together to optimize decision making and help ensure risks are properly mitigated.
A good compliance program can have significant, positive, secondary benefits on business operations. Return on investment using effective compliance monitoring is evidenced through:
- Reporting (improved monitoring results)
- Better audit results
- Decrease in the number of incidents (errors, regulatory violations/fines, etc.)
- Increased monitoring program efficiency (possibly decreased cost) over time.
Do you know that you are in compliance?
What tools/means you use to know your in compliance?
At WP Management System Solutions, we feel that our new system has addressed most of the on-going issues for Compliance Monitoring. Our new system not only provides a greater number of tools and can also save your valuable time that would otherwise be wasted in registering, linking and mapping your compliance monitoring related data. What we have determined from our own experience is that there is a real problem at the moment that is not going to disappear, the regulatory environment is an ever-expanding universe of rules and directives and it is a challenge for managers to keep abreast of the constant change. We are confident at WP Management System Solutions, our tools will address these issues and be a long term solution for your immediate compliance monitoring problem.
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