Although the financial services industry faces many unique challenges, regulatory risk management is among the most important. Compliance protects both the financial services provider and its clients — but keeping track of every regulation and making the correct changes can be highly demanding.

The key to regulatory compliance is to have a smart risk management process. Here’s what that looks like for financial services organisations and what technology makes it possible.

Why regulatory risk matters

Although compliance policies introduce many challenges, it’s helpful to keep in mind that regulatory change happens for a reason. Top Australian financial regulators work to protect consumers, strengthen the economy and help providers offer better products and services.

That being said, when compliance isn’t managed down to the letter, the result is regulatory risk. These risks matter for a number of reasons:

  • Constant changes: Regulatory change is fast-moving and consistent. Falling behind for even a few days can make it increasingly difficult to catch up with compliance.
  • Fines: The Australian Securities and Investments Commission (ASIC) can impose fines of up to $555 million depending on the severity of the offence. 
  • Legal enforcement: If ASIC or another regulator takes legal action against your organisation, you could face court or jail time, fees and more.
  • Reputational damage: Legal enforcement, fines and disciplinary action can lead clients and employees to lose trust in your organisation. Furthermore, regulators often add non-compliant financial services providers to public lists.
  • Remediation: Addressing failures in regulatory compliance requires time, money and resources, which can greatly impact efficiency and productivity.

To learn more about the cost of falling behind on regulatory change, download our free whitepaper.

Best practices for keeping up with regulatory risk management

Operational risk may be inherent in financial services, but it doesn’t have to be all-consuming. There are plenty of ways to keep up with compliance and regulatory risk management, including:

Staying informed

The most important solution to compliance risk management is staying informed. That means financial services providers must always know:

  • Which regulation is changing and why.
  • When these changes go into effect.
  • Which policies and organisational processes are affected.
  • What the penalty for non-compliance might look like.

While some of this information can be gathered from newsletters, media releases from regulators and third-party resources, financial services organisations are still responsible for independently identifying impacted processes and documentation.

Making the right changes at the right times

With dozens of weekly regulatory updates from each of Australia’s top financial regulators, financial organisations must have the capacity to quickly pivot their processes. That means knowing which updates to make, how to make them and when this work needs to be completed.

Ensuring updates are accessible to all staff

Even when impacted policies have been restructured and associated documents rewritten, compliance risk management isn’t finalised. Your organisation must still distribute updates to all staff and stakeholders — because if team members aren’t following the new requirements, your company isn’t  compliant. It’s also wise to utilise analytics tools to see when staff are reading new policies and what actions they take afterwards. You can use these insights to improve compliance training across the organisation.

Proving your efforts

A regulatory compliance team can’t just make changes; it must also prove to regulators and auditors that these changes are in effect. That means it’s important to be able to track updates to your policies, procedures, documents and associated language.

The best way to ensure compliance

With thousands of changes and seven financial regulators to keep track of, financial services providers can start to feel as though compliance risk management is permanently out of reach. However, there’s a simple solution that enables all the best practices outlined above: a risk management platform like RegsWeb.

Here’s how it works:

1. A real-time policy library

Regulations and policies are stored in the RegsWeb library and changes to regulations can easily be traced to a policy whenever a change occurs. It’s easy to see exactly what language was changed and ensure you’re reading the latest version of a given regulation.

2. Visually linked documents

When you upload internal policy and procedure documents to RegsWeb, they become dynamic, searchable web pages. Additionally, you can create links between your own content and the regulations released by ASIC and other regulators. These visual connections drive efficiencies and enable quick, compliant updates whenever a regulation changes.

3. Consistent visibility and tracking

With RegsWeb, you can keep track of changes you’ve made, distribute the most up-to-date documents across your financial organisation, track access and more. This visibility doesn’t just keep you on the right track with your risk management process — it helps you provide proof of compliance during an audit.

4. Expert support

Even when your system makes connections, automatically uploads regulatory changes and allows you to highlight impacted policies, it can be difficult to know what your next steps should be. Expert support from MIntegrity helps you interpret and implement regulatory change across your organisation, giving you the advice you need to confidently support your compliance team and reduce operational risk.

Master regulatory change management with RegsWeb

Wondering how to manage regulatory risk? The key is to give up trying to track, juggle and implement everything on your own. Newsletters and media releases only go so far; you need a solution that saves your internal teams from trying to piece together an inherently confusing regulatory landscape.

With RegsWeb, you can cut out these manual processes and let the technology do the work. From updates to regulations and searchable content to policy highlights and document distribution capabilities, RegsWeb has everything you need to manage regulatory updates without all the uncertainty. This doesn’t just benefit your compliance team or even your financial services business as a whole; ultimately, it protects your reputation and your ability to deliver helpful services to clients.

If your financial services organisation needs help with regulatory risk management, contact us for a demo today.


*Blog image by mindandi on Freepik

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