In a recent post, we spoke about the importance of the c-suite’s attitude in building a culture of compliance, codified in SEC-mandated written policies and procedures. It’s often referred to as “tone from the top.” Today we’re talking about the role that compliance technology can play in creating and maintaining a compliance culture.
In any discussion of building a compliance culture, including adopting compliance technology, the central figure is you, the CCO. It’s you who understands regulatory risk – what areas of the business are vulnerable and need to be monitored on a day-to-day basis. You keep up with regulatory agency exam priorities and have a good idea of what data you’ll have to quickly deliver when the exam letter arrives.
You know that you’re up against data driven enforcement and that you can no longer protect the firm with a spreadsheet-based compliance program. It’s you the CCO who must establish an ongoing dialogue with top management and the board to communicate the risks as well as potential risk-management solutions. You must also make the business case for investing in compliance technology.
Technology Puts Teeth into Policies and Procedures
A powerful reason for implementing compliance technology is that it puts teeth into policies and procedures. One of its most important contributions to compliance culture is transformational –promoting good behavior.
During a recent webinar, we polled participants on what their greatest compliance fear is. By far, the top answer was the possibility that – despite best-practice hiring techniques – their company might be harboring one or more bad actors.
Sad but true: When employees know that trades, emails, potential conflicts, insider trading, contributions and many other areas of potential error or wrong-doing are being automatically monitored 24/7/365, they tend to exert extra care and stay on the straight and narrow. Human nature.
If there are any folks who transgress despite the eye in the sky, compliance software can spot discrepancies, raise red flags and alert the appropriate managers, who can then nip problems in the bud. Technology certainly helps CCOs sleep better at night.
Another valuable result: The idea that compliance is important enough to rate an investment in state-of-the-art technology can become a point of pride for everyone — management, employees and partners. It’s also a key differentiator in the business development process. Clients and prospects feel safer when these controls and attendant security are in place.
Technology and Compliance Culture Go Hand-in-hand
The SEC and other regulatory agencies look favorably on firms that are proactively deploying compliance software. They see automation as indicative of a positive compliance culture. In their eyes, the two things are inseparable. Ergo, if you have technology in place, you have a compliance culture by default.
So…what should compliance technology look like and what should it do for you and your firm’s culture? We found a perspective that matches our own in a recent post about culture and technology by compliance expert Michael Volkov, Esq., who writes the “Corruption, Crime and Compliance Blog.”
Here are a few excerpts:
In response to ever-increasing demand to do more with limited resources, compliance businesses are bringing new and innovative technologies to companies to manage their ethics and compliance programs by leveraging limited resources. As the importance of compliance has grown, so too has the demand for new and innovative compliance products.
Compliance professionals have to weed through the various product claims, test the effectiveness of the new tools, and then make sure the product can be designed to promote the company’s ethics and compliance function. Growth in the industry has to move beyond third-party and supply chain risk management.
Compliance professionals need to demand more integrated products that cut across a variety of risks facing companies.
Compliance officers juggle and balance a number of issues that require integration – training, internal investigations, auditing and monitoring functions, and many other significant activities. The more such functions can be coordinated and integrated into a single technology, the better for CCOs.
Culture is an important function that needs to be monitored. Regular surveys and monitoring of corporate culture has to be a part of this new product mix. The sooner we jettison the old model of annual or bi-annual employee surveys, the better for everyone.
We agree with Attorney Volkov. This is precisely why we built an all-in-one compliance software solution. You can get a look at a graphic of the various modules in this recent post about assessing risk to build a relevant compliance program and automate it.
When you think “compliance culture” think “compliance technology.” Learn more about the role compliance technology can play in getting you exam ready by signing up for our webinar “Protect Yourself from New SEC and FINRA Data Tools and Accelerated Exam Frequency with Compliance Technology”.