Compliance officers are facing a new challenges which demands dynamic action across an expanded set of responsibilities. As per the Accenture 2017 Compliance Risk study, investments in Compliance are projected to increase for 89% over the next two years. This is because institutions want to meet the demands of the digital age.
CCO’s role will move beyond strategic and risk advisory as he will be facing diversity of risks. It will be upon his office to proactively understand, monitor and manage them. In the coming years, cyber risk will be amongst the top three most challenging risks to manage. This underscores the need for Compliance to continually advance their capabilities and innovate. This helps understand, monitor and manage the shifting 89% demands of the new risk ecosystem.
Compliance functions are encouraged to invest wisely in intelligent and cost effective tools. In turn, it will help them deliver sustainable risk management solutions.
While investment in compliance is rising, the companies have not taken advantage of the tools and technologies to effectively leverage it. “Innovators” in every industry are establishing leadership positions through investments in advanced analytics, artificial intelligence, or managed services. “Integrators” are moving towards becoming part of an integrated second line of defense that shares infrastructure, skills and capabilities with other non financial risk functions, while a third group of “Improvers” are taking incremental steps as they acquire a better understanding of business expectations.
Accelerating demands of the digital age and the expanding awareness of the importance of a robust governance policy has redefined the rules of Compliance. There will be new levels of volatility within the risk ecosystem that Compliance needs to manage. Risk assessment remains a highly manual activity even today, with only one in three functions using risk mapping/reporting tools, and less than half using big data analytics. Last but not the least, the focus should therefore be on investing strategically in the function to solve for sustainable and adaptable solutions that do not compromise the integrity of the control environment.
Previously, management could not monitor all the functions and their compliance activities because they all were in silos. They could not proactively take any action. Today, tools like VComply have made it possible to fuse enterprise-wide compliance tasks. This helps them identify how the risk works across the business. This information will improve compliance controls automatically.
Tools which shall enable a Compliance officer are already in place. Moreover, advances in compliance-ready technology for the digital age are cost efficient. They are effective in driving consistent outcomes in the control environment. It can yield actionable intelligence that enable CCOs to make a strategic impact on the business. Thus, leveraging these tools is no longer optional for an entity.
The companies cannot afford continued inaction. Thus, they should aim at long-term business outcomes and commit to medium-term results. Also, compliance officers with the skills needed to exploit these technologies is key for gaining returns on investment. This should continue to be a barometer of “success” for senior management sponsoring the transformation.Add to favorites