The New Players in the Field of Finance: Compliance Consultancies

One of the most important aspects of conducting a business is ensuring compliance with the legal structure of the nation or society it is operating within, i.e. the legal framework and guidelines governing all business in a particular country, or in a particular kind of trade. In more explicit terminology, this is known in the world of business as “financial compliance”. To acquaint readers more closely with the term, its main goal is to promote ethical conduct and compliance with rules and regulations. This applies to how financial transactions and trades are handled, how client accounts are maintained and processed and how the organization operates as a business. The role requires actively staying abreast of the latest laws concerning the financial sector and to make sure that the functioning of the Company accommodates those. In simpler terms, financial compliance ensures that a firm adheres to regulatory measures passed by the financial ministry of the concerned country (where the firm is based).

Most firms have their own Compliance Officers (who support, educate and advise internal employees by checking-in on a regular basis to ensure policies are being followed). In more senior roles, COs have external facing duties that include being in regular contact with regulators and other compliance officers in the particular industry, in order to stay updated about regulatory issues and leading practices.

However, sometimes this particular service is leased or hired, or in other words “outsourced” to companies who specialize in this. These have come to be known as Financial Compliance Services for hire in the market, and quite a few have made their presence felt by their success and popularity rates in the field.

Their main job is to replace and reprise the role of a Compliance Officer in the firm who has landed them the contract. All the usual responsibilities of a Compliance Officer are then handed to them, e.g., monitoring whether the business is run according to applicable regulatory requirements, operating processes and policies. In case any discrepancies are detected, the Financial Compliance Services firm would be held responsible for reporting non-compliance issues to management and then working with staff to correct the issue. In short, to ensure that a firm’s ‘Certificate of Compliance’ is not revoked by the State.

But what do we understand by the term ‘non-compliance’? Some of the things that can be listed under the definition of ‘non-compliance’ include: Policy misunderstanding, competing time priorities, technical systems issues or systemic policy issues. Addressing these mistakes and helping to correct errant practices or policies, as is understandable, requires a great deal of tact, and persuasion and communication skills, to enable the staff to rectify such mistakes and/or prevent similar erring practices from re-occurring. The breadth of focus for the role is often influenced by the size and complexity of the (client) firm.  It’s not an easy job, and requires a lot of honing of skills. It has, in fact, been called as one of the most stressful and punishing jobs in the financial sector.

A global survey of compliance professionals in 2013 in the UK had shown that the firms struggled a lot under the grill of stringent and punishing regulations, often receiving little or no support from the authorities. Almost 80% of the people who had been interviewed had expected a steep increase in the volume of regulatory information in that year, and only about one third said that the compliance maintenance budget would remain the same. Under such circumstances, the scope, and hence, the market for firms which solely or mainly deal with regulation compliance, has increased. More and more companies are now outsourcing their responsibilities to established speciality consultancies in this field. And the experiences are normally not un-rewarding.

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Created on Dec 31st 1969 18:00. Viewed 0 times.

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