Fairwords Weekly: Compliance as a Competitive Advantage, Progressing and Future-Proofing Compliance Plans, and More
June 22, 2023
“There is a need to adjust technology, employees’ behaviors, and processes. The DOJ does not expect companies to ignore its requirements or claim ignorance. They want to see that a policy exists, that it’s enforceable, and that there are repercussions that act as deterrents.”
– Bart Siegel, Managing Director of Deloitte Risk & Financial Advisory, Deloitte Transactions and Business Analytics LLP
This week, learn how compliance gives banks a competitive advantage. Explore the Department of Justice’s (DOJ) updated guidance emphasizing retaining mobile device communications. Finally, consider how to progress compliance plans from paper to practice and the importance of finding the right communications compliance technology partner.
Collaboration between compliance and strategy teams in banks can create competitive advantages by protecting against risks and capturing opportunities. It allows for a differentiated client experience, investment in fast-evolving areas, resilience against geopolitical disruptions, improved productivity, and stronger programmatic mergers and acquisitions. To initiate collaboration, banks can review client-facing processes, include compliance experts in agile teams, and clarify regulatory risks and requirements. The compliance function can also contribute to strategic planning, due diligence, and post-merger integration. Overcoming obstacles and fostering a culture of collaboration are essential elements for sustained and impactful change.
The DOJ has issued updated guidance for corporate compliance programs, emphasizing mobile device usage and the retention of corporate communications. Companies must align compliance programs with government expectations, demonstrating documented processes for capturing and retaining relevant data. The guidance addresses challenges with self-destructing messaging, BYOD policies, and personal mobile device usage. Compliance requires risk assessments, refined processes, clear enforcement policies, and prioritized compliance training. The DOJ expects comprehensive compliance programs to avoid penalties and litigation.
Recent updates to the Department of Justice’s Evaluation of Corporate Compliance Programs (EECP) guidance highlight the importance of individual accountability and a culture of compliance. Measuring compliance can be challenging, but certain metrics can help gauge the culture of compliance within an organization. These metrics include performance objectives tied to compliance, investigation data, training completion rates, attrition data, and culture survey data. Evaluating these key indicators can identify areas prone to non-compliance. Good corporate governance practices contribute to effective compliance structures. AI and machine learning offer opportunities to enhance compliance efforts by identifying correlators between violations and specific factors and detecting risky transactions. However, balancing predicting compliance violations and addressing privacy concerns is crucial.
Regulatory scrutiny in financial markets is rising due to global uncertainty, and communications compliance is a top concern. Regulatory organizations focus on communications surveillance to ensure firms effectively capture and analyze communication data. Failure to comply can result in fines and legal action, necessitating comprehensive surveillance systems covering all communication channels. Compliance teams are under pressure, and partnering with RegTech can help manage risk and compliance while freeing up resources. Choosing the right communications compliance technology partner that supports real-time surveillance, AI-based risk detection, and an easily searchable archive is crucial. Investing in technology that monitors communications, AI-based detection, and comprehensive data storage is essential to meet regulatory requirements in 2023.