What it Takes to Successfully Manage Compliance


Compliance management is taken seriously by organizations but there are still billions of dollars in fines levied at organizations every year. Organizations struggle with preventing compliance violations because compliance requires constant vigilance. There are, however, some organizations which have managed to achieve compliance levels that always satisfy regulatory bodies and auditors. The secret to a good compliance management framework is the right ingredients. As any cook will tell you, to make the right dish you need the right ingredients. You cannot achieve the right taste if you are missing crucial ingredients.

Let’s look at the ingredients that are needed.

The Right Personnel

Compliance requires people who are qualified, dedicated, and experienced. Management needs to ensure that it promotes the right type of people to the right positions in the compliance department to get the best results. Employees that are great at keeping records and always keep their work managed properly will be great at keeping and managing compliance information. Employees that always seem to find a problem in things are essential as well – they are needed to act as internal auditors. People need to be given jobs not just based on their resume but also on the potential they show within the organization. Different people focus on different parts of the job and an organization needs diversity in thought to truly succeed.

The Right Technology

Technology is no longer a competitive advantage – it is now a basic requirement to be competitive. Large organizations seem to fare better at compliance because of their significant investment into compliance and regulatory technology. This is a major problem for smaller organizations. Smaller organizations could never beat large organizations in resources but always had the advantage of agility. They could change course quicker, thus outmaneuvering their larger but slower counterparts. The lack of access to efficient technology removed this advantage.

The situation has now changed; compliance management systems are no longer out of reach of smaller organizations. Cloud based solutions can be acquired easily and affordably by small organizations.

The Right Culture

The hardest part about compliance management is creating the right culture. Since compliance requires constant vigilance it needs a culture that is based on compliance. Compliance should not be treated as an annoying obstacle which makes work more difficult, but it is treated that way in many organizations. As long as employees dislike compliance there will be compliance violations. The problem with culture is that it is not easy to foster the right one. Simply giving punishments and rewards is not enough to create the right culture.

A good way is through training and development. There is no need to arrange disruptive training for the whole team – instead training and development should be routine. If employees are told everything at once they will forget most of it. Instead management should take different topics within compliance and speak in detail about them.

The important thing here is to not just tell what the people are required to do but also why they are required to do it. Employees don’t just need to know that they are trying to avoid a fine, they should understand the objectives of the regulations and laws they are complying with. This makes a huge difference in how people perceive and enact compliance within the organization.

Anti-Money Laundering regulations are a great example. A major reason that AML/BSA (Banking Secrecy Act) are so important now is terrorism. Terrorists need funding and this funding arrives through banks and other organizations that do not focus on compliance. If you simply tell employees that they need to focus on AML/BSA they may not understand the importance of it. If you tell them that AML/BSA help fight terrorism by reducing the available funding for terrorists their perception will be very different.

Organizations need to realize that traditional means of compliance management are now outdated. We need to ensure that we have the right people in the right positions with the right tools working under the right culture. While it may feel like a gargantuan task to introduce all these things within your organization, it is vital to do so if better compliance is required. As the world of business keeps getting faster and faster compliance will have to keep up.

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