Key Tips for Successful Compliance & Conduct Risk Management in Finance
We hear from Kelly-Ann McHugh, the Asia-Pacific Director for MyComplianceOffice (MCO) who is responsible for the growth and retention of our Asia-Pacific region, across Conduct Risk, Employee Compliance and Control Room compliance activities. Kelly-Ann provides the voice of MCO’s customers to the company’s global product management teams to enhance and develop their suite of regulatory solutions, ensuring the needs of Asia are met. She is also responsible for growing the local office to support the region.
Kelly-Ann has 13 years of experience in the compliance & risk management industry including both as a practitioner and as a solution provider.
MyComplianceOffice is the leading provider of Conduct Risk Solutions to the financial services sector, with a focus on Conflicts of Interest challenges, the ability to identify, detect, and prevent misconduct and ensure adequate controls in mitigating these risks.
Why is creating a strong culture of compliance mandatory for financial services firms?
Creating a culture where regulatory obligations and ethics are embraced should be the foundation of any firm, regulatory or otherwise. But over the years, we have seen banks may pay more than $200 billion in fines since the financial crisis (and that number is growing!), which shows there is still more work to be done. These years of continuous failures in large and small firms to follow regulatory best practices, but worse, put the self-interest of themselves above the interests of their own clients and the public leads to a lack of trust in the market. Thus, embedding an appropriate culture of compliance from the top-down, bottom and across the middle is more than just a mandatory requirement, but it is an expected behaviour across firms.
What are your key tips for successful compliance and conduct risk management for financial services companies?
As I’ve mentioned, creating a culture of compliance is everyone’s responsibility within a firm, and that must start with some basics, as well as enforcing behaviour along the way. There are three key areas I see as assisting to embed the culture of compliance:
- Policies and Procedures – Ensure your firm has easy to understand, digest, and communicate policies. As soon as policies, procedures and handbooks become complicated and hard to understand, they are ignored or forgotten.
- Training – Both face to face and eLearning can be used to optimise the learning process. Face to face (or in the COVID times, remote live training) should be used to share important elements of how you do business. This training should be supplemented by eLearning. eLearning doesn’t have to be long and boring either, it can be utilised in short sessions (up to 10 minutes) to reinforce a topic. Perhaps there had been a recurrence of certain compliance breaches in your firm or a firm similar to yours. These micro-trainings are a great way to reinforce your policy and learn from real-life case studies.
- Embedded Controls – Now take your policies and the training and bring them to life, make it easy for staff to raise issues, raise potential conflicts, and submit information to risk and compliance teams. Without this, where regular forms, attestations and certifications (e.g. declaring personal trading, outside interests, gifts, or other firm conflicts) are completed manually or via pdf forms, you may find there is a general disinterest and lack of uptake in actually carrying out the policies and procedures in your firm.
What are the benefits of having a centralised compliance management platform?
Disparate solutions for managing employee compliance, in particular, mean there isn’t a consistent way for your employees to interact with compliance, yet for compliance officers, it means a ‘swivel-chair’ compliance function, reducing the time to act on potential areas of concern. By using a solution like MyComplianceOffice you are enabling conflicts of interest to be detected when they occur, rather than days or weeks after the potential conflict arose. For example, if your firm is looking to conduct research on a particular business entity, which is listed in Europe, you have employees who hold stock in a subsidiary of this firm, and your company has also provided a lot of gifts to this firm, if you didn’t have a consolidated system, you would have to check at least four systems to determine if there are any potential conflicts, where as with an integrated solution, the clearance conflict check on this business entity should identify the conflict immediately. That is the type of benefit a centralised solution can provide to front office and compliance teams.
What role does technology play in creating a culture of compliance?
Technology can be implemented in many areas of the compliance value chain, and all of these areas are important to instilling a culture of compliance:
- Awareness – By implementing technology to assist in the research and monitoring of regulatory changes, firms can stay ahead of future changes, and ensure their internal policies are kept up to date. Regulatory change systems allow firms to monitor such changes, and map regulatory change directly to policies, procedures, risks and controls, allowing for swifter changes in internal processes.
- Education – Technology can assist firms as already mentioned, in embedding compliance training and in particular micro or short training where cases of good and bad behaviour can be shared to reinforce your policies and values as a firm.
- Communication – Compliance Software Technology can assist in the sharing of information across a disparate workforce. Whether that be the communication of changes to policies and procedures, communication of upcoming training, recent bad and good behaviour, or simply communicating responsibilities related to annual certifications.
Solutions like MyComplianceOffice can be used to both distribute and enforce the completion of such activity, you are assisting in creating the appropriate culture.
What are the advantages of MyComplianceOffice’s compliance management platform?
MyComplianceOffice’s single integrated solution provides an easy Software as a Service (SaaS) platform for small and large firms to get started in embedding an integrated compliance management solution. Our software can assist firms with all aspects of Employee Compliance, Third-Party Risk as well as Firm Trade Surveillance to provide near real-time conflict checking across multiple data elements. Our solution uses integrated third-party company and security data to allow firms to quickly identify conflicts across all elements of their business.
What problems does technology like MycomplianceOffice solve for its customers?
MCO’s customers range from as small as 10 staff through to 100,000 and as such the breadth of challenges these firms face can be varied. However, at its core, our customers are challenged with the ability to provide timely, auditable and adequate information to regulators. A traditionally paper-based workflow becomes difficult to keep up with as your firm grows, some of our smaller firms have found that moving to technology has repurposed a compliance officer onto more productive activities. Some of our larger firms are challenged with disparate information in multiple different systems, that means traditionally slow turnaround time in clearing conflicts so front office teams can in fact do the needful and conduct their business. By moving to a single integrated solution where Deal Transaction Conflicts, Firm Trading and Employee Conflicts are managed in one solution, this time is significantly reduced.