Become future proof with lean compliance risk management | Regulatory Risk | Deloitte


Empower operational performance with lean compliance risk management

Align risk elements to become future proof

The past decade financial institutions have focused on reducing compliance risks by tackling one compliance risk element at a time. To become future proof, these compliance risk elements should be aligned. With a holistic approach to compliance risk management you will empower operational performance.

The importance of compliance risk management

The legal landscape is changing very fast and both customer and regulator expectations increase. Financial institutions are exposed to a greater degree of compliance risk than ever before. Specifically, compliance risks are the threat posed to a company’s license to operate and which could impact the institution’s ability to achieve its strategic objectives. Managing compliance risks has become more and more complex.

Although an improvement of managing compliance risks at financial institutions is already clearly visible, there is still a gap to close. The following trends are closely related to this:

  1. Increased regulatory focus;
  2. Poor line of sight of compliance risks to senior management;
  3. Compliance is often bolt-on not built-into existing processes and controls;
  4. Poor management of business requirements;
  5. Too much silo approach;
  6. High cost of compliance.

Compliance risk management needs to become more efficient to meet future demands from a regulator and customer, but also society perspective.

Compliance Risk Management Powers Performance

Create a continuous cycle

Over the recent years, compliance risks have become more and more complex to manage. With the regulator increasing the minimum requirements of managing compliance risks organizations are forced to improve their compliance risk management. What is often a manual and stand-alone exercise should become a continuous cycle with real-time insight in risk exposure and quality of controls.

To reach this desired, “lean” state of compliance risk management, organizations should align all compliance risk elements. To only implement risk assessments without providing training and communication will not be effective. To only formulate a risk appetite without embedding it in policies and procedures will not lead to changes in daily operations. By creating a holistic compliance risk management the effort to be in control will lessen while the quality of business processes will increase.

Key success factors

There will never be a successful implementation and conservation of a sound Compliance Risk Management framework without a couple of essential organizational elements, being:

  • Reporting: Reporting findings, observations, test results and results from risk assessments consequently to the right group of stakeholders.
  • Tooling: Business processes can often be more efficient and effective by using the right tooling, IT infrastructure and holistic case management system.
  • Governance: Roles and responsibilities must be clearly defined, including mandates, monitoring, KPI setting and accountability, to be able to govern the company effectively.
  • Training & communication: Only by an effective and recurring training program and clear communication people can be encouraged to do the right thing, which is the first step to combat and prevent non-compliant events.

An empowering force

With our knowledge of compliance risk management, emerging technologies and regulatory requirements, we can help your organization to set the next step towards a lean compliance risk framework. By measuring the current state of all compliance risk elements we create a customized plan to improve both quality and effectiveness where needed. Compliance risk management will become an empowering force driving your organization to reach its strategic goals.

More information?

Want to know more on our vision of a holistic and lean compliance risk management? Please contact Martin Eleveld or Christiaan Visser via the contact details below. 

Inside the brochure are contacts included for different areas of expertise.

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