COVID-19: Staying on top of your organization’s compliance goals during the new normal

COVID-19: Staying on top of your organization’s compliance goals during the new normal   

Take it from us, it is not as difficult as it seems.

Written by Yuri Kovalevsky

With almost all organizations adapting to the new normal since January 2020, it seems like work as we knew it has undergone a remarkable revolution in the post-COVID-19 era. Big names, popular brands, and well-established organizations have struggled to stay afloat amid the disastrous consequences of the COVID-19 pandemic. Having witnessed that a lot of the existing practices vis-à-vis conducting business, as usual, has come unraveled, brings about uncertainty and panic. Financial institutions, specifically, have adapted their business operations to a more remotely managed and agile structure. What seems crucial during these changing times is staying on top of existing compliance regulations and adhering to the changes in regulatory policies introduced by authorities trying to mitigate new risks and challenges.

The new normal for compliance in Financial Institutions

It is safe to say that the job has not been easy for compliance managers in financial institutions.

In addition to managing COVID-19 precautionary guidelines, now monitoring and risk management have to be optimized for changes in operational dynamics and customer preferences. Financial crime has adapted to the challenges of the pandemic, and so have the regulations. Financial institutions are required to adopt stricter risk monitoring guidelines and maintain stringent controls to counteract criminal activities.

Adequate emphasis through revised regulatory guidelines released by FCA in the U.K. and by the Securities & Exchange Commission in the U.S. has been laid out at the end of the first quarter of 2020. Specific focus has been on employing adequate systemic controls and updated regulatory compliance protocols. Regulators have acknowledged there has been a disruption in the normal way of doing business in compliance sectors. However, they still expect financial institutions to stay aware of changing monitoring needs and adopt relevant measures for combatting financial crime in the COVID-19 period.

Keeping up with compliance measures is obviously a top and continuous priority for financial institutions. As a foremost priority, responsible organizations understand that compliance with these regulations can be the difference between success and failure.

For organizations to ensure compliance with these changing set of standards requires intensive restructuring and overhauling of business processes. The question that most people ask about is that: is it actually worth it? The answer to this question is simple – the costs of non-compliance can far outweigh the cost of compliance. Inadequate controls have led to massive losses, both reputational and monetary, for organizations.

Three key trends in the COVID-19 period that seek attention from compliance managers

  1. The Digital Shift

Prior to COVID-19, we saw that banks and financial institutions had structural processes in place for identifying regular versus suspicious transactions. With the massive shift towards non-physical modes of transacting, these processes need to be re-evaluated.

Banking and interaction channels that customers prefer to access define the way compliance is structured. The pandemic’s increasingly physical implications have brought traction on alternate banking channels. The use of ATMs and Bank Branches have reduced. People prefer online payments and interactions, be it a point of sale, e-commerce, or transfers of funds through digital banking channels. A rising need is seen for communication and to stay in touch through digital channels as well.

Previously instated high transaction limits on physical channels became redundant, and volumes on digital transactions have risen. A re-evaluation of the financial services strategy for channel-based risk monitoring is important in this scenario. Implementing technologies that help you monitor a shift in customer preferences and highlight irregularities can make this job easier for you.

  1. Managing a Remote Workforce

Over the past few months, compliance teams, in the same way as other office-based jobs, have adjusted to another area of work. The ‘work from a remote place’ direction has also seen compliance experts and their associates face a new set of problems. Apart from adjusting to a difficult-to-maintain work-life balance, their jobs have become even more complicated.

For anybody associated with ensuring compliance, there is an extra layer that has been added to their jobs – how can they monitor operational compliance over a disseminated workforce? Guaranteeing that transactions adhere to the regulations set by financial authorities requires a great deal of work. It is, primarily, where technology becomes the most useful.

Organizations that have integrated the latest technology into their compliance activities have been able to cope up with this challenge while the rest are still looking to figure a way around this issu. Access to the latest software and tracking tools for integrated compliance monitoring can reduce the disassociation compliance professionals may feel during this time.

  1. Increased Customer Vulnerability

Being under lockdown and adhering to unprecedented social regulations, customers are living through uncertain and volatile times. Besides, the comfort of visiting a bank branch for conventional customers was taken away. In such times, scammers and fraudulent schemers find these vulnerable customers an easy target.

We saw an increased reliance on customer service channels such as IVRs and online chats. Financial institutions have had to invest considerable resources in establishing a robust support infrastructure. The frequency and importance of these interactions have exponentially risen, and so has the need to monitor them. The more you know about a customer, the easier it is to understand what is regular or irregular for them.

An efficient tracking and recording tool for customer interactions such as voice recording software can enable your organization to keep track of the vulnerabilities in customer behavior.

How can our technology help?

As financial institutions deal with a progressively multifaceted regulatory environment internationally, they are tasked to meet various security and compliance requirements as they relate to voice and data maintenance and security. Having a technology partner as a holistic compliance service provider eases up your data tracking and monitoring concerns.

Custodia aims to simplify your organization’s compliance goals tracking by providing a technological experience that is easy to implement. Whatever the scale of your organization, our tools are ready to deploy. We are hands-on with all types of installation and migration, servicing, support, software development, and recording of all channels of communication, including video and voice.

Needless to say, the new normal is something we all are trying to adapt to. Along with its unique challenges, it has also brought the opportunity for increased engagement with customers. Organizations that have adopted strategies to cater to these uniquely developed needs have stayed afloat and also shown progress during these times. However, taking into account the uncertain future, being a part of the highly regulated financial sector, we must change and adapt to change to become more resilient and flexible.

With the right technology tools, partnerships, and strategies, we can jointly minimize susceptibility to financial fraud and risk, and help you stay focused to achieve your regulatory objectives. A safe and trustworthy financial technology infrastructure is the need of the hour in the new normal.