The Steep Costs of Financial Compliance and the Solution

“Some British banks aggressively sold ‘ineffective and inefficient’, but highly profitable, payment protection insurance (PPI) for more than a decade,” according to The Guardian. These compliance breaches, which resulted in billions of fees to clients who were mis-sold products, highlight the potential repercussions of bad or inefficient financial advice. This challenge isn’t limited to the UK…

The wealth and credit management compliance industry in Australia is in need of change. There are a significant number of manual processes and overhead associated with audit controls for compliance purposes. To meet the Australian Securities and Investment Commission’s (ASIC’s) regulatory monitoring and supervisory compliance requirements, dealer groups must be able to demonstrate that regular compliance audits are carried out with each adviser.

The cost of compliance, combined with the risk of non-compliance, poses a major challenge to distributors. Firms want to reduce errors that result from manual intervention, a lack of process and enforcement of policies. There is also a desire for advisers to spend more time building relationships and less time on administrative tasks. Accomplishing these goals requires technology with controls managed by the business, to:

  • Improve the quality and efficiency of advice
  • Monitor and mitigate client and adviser risk
  • Achieve transparency, consistency and compliancy
  • Regain investor trust
  • Reduce the operational cost of compliance

So how can you go about ensuring the correct advice is given every time? By empowering your business to control the authoring and execution of compliance logic before the provision of advice. This is a progressive transition from reactive to proactive compliance controls, and it is achieved via decision management.

My next blog post, which will be released shortly, will quantify the benefits of decision management and it will highlight the key to decision management for compliance projects…

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Nathan Urquhart

Nathan Urquhart has over 12 years of experience in the global financial services industry, specialising in decision management, business transformation and regulatory compliance. He is currently a Service Delivery Manager and Decision Management Subject Matter Expert within Sapiens DECISION where he delivers global business transformation projects. Previously, he held numerous executive and management positons within the UK including Head of Professional Services and Head of Service Delivery.

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