Why should talent still be at the forefront of your compliance function?
Compliance teams have, it is fair to say in recent times, had a seemingly never-ending array of differing pressures bestowed upon them, from the global pandemic to the vast number of regulatory changes that are continually being passed by regulators and governments across the world.
One of the biggest issues arising from these scenarios is often adjusting to new norms and doing so in a manner that is efficient, as well as embedding behavioural change within organisations.
With backlogs of workloads often resulting, many businesses are increasingly turning to automated systems in hopes that they can place fewer pressures on internal teams, whilst streamlining processes and productivity at the same time.
Some of the latest compliance automation trends include the adoption of EKYC systems. However, many within the compliance and regulatory industry question whether these systems of digital transformation, such as AI and EKYC, can realistically solve KYC compliance constraints?
What has led to the shift in focus for compliance teams?
It comes as no surprise that global firms and their compliance needs have changed of late. 2020 saw a significant shift for compliance teams as digital transformation – the buzz word everyone seemed to be discussing for years in advance – became necessitated for a very quick adoption for many due to the outbreak of the COVID-19 pandemic.
COVID shifted customer needs and with that came a need for not only seamless onboarding but most importantly, quick onboarding.
This is especially prominent for COVID loans being distributed globally. UK Banks have distributed more than £75billion to 1.6million firms under several emergency support schemes. The financial ramifications of the pandemic meant that many leaped to digitise their systems, but at what cost to their compliance teams and processes?
The latest trend of adoption, EKYC, promises onboarding with the press of a button. But does such a digitisation of this process truly allow for a thorough and fit-for-purpose KYC process?
The speed of digital onboarding, and the benefits in terms of database checks and identity validation via automation are undeniable, however, the human eye watching in these scenarios will always be key.
Ultimately, to digitally transform, you still need people
Automation can help many within financial verticals to ensure seamless customer onboarding, purchasing, and has been a help to general compliance functions as well.
In terms of the administrative side of the business, many technology automation solutions will be more efficient than humans simply because human error can never be fully avoided. But when it comes to digital transformation and the need for speedy adoption, human interaction and QC methods remain vital in the overall compliance process.
COVID has undoubtedly created a backlog of work for compliance teams, and many firms have and are still in the process of adopting digital transformation to ensure they can cope.
These types of solutions take time. It’s not an easy task to fully integrate digital systems and become truly transformative – they take months, often years, to fully permeate and settle into a business as BAU.
People will still be needed to provide oversight and troubleshooting, as well as ongoing monitoring, as the technology is fully integrated and adopted. You can have the most advanced KYC processes and systems, but you will still need the right skilled talent to monitor it.
Firms should be investing in onboarding the right tech talent – talent who have key compliance training as well as the necessary skills needed to embrace and adopt new technology and automation. The secret lies in finding a balance between the two.
A robust platform equals a combination of technology and people
A recent speech made by Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA, stated the need for the ‘tone from the top’ when looking at the 5 Conduct Questions (5CQ), meaning accountability and engagement should be reliant on every individual within that organisation.
His speech served as a reminder that all employees should be personally accountable for conduct rules, which impose broad obligations. Failures are not necessarily failures of compliance, but the consequence of choices made by individuals.
Ensuring that the skills and suitability of the individuals you retain are just as imperative, if not more so than the technology automation you implement.
The human is still the single most important element of your compliance function and regardless of what technological development or trend comes to play, will always be. Hiring the right talent should be at the forefront of ensuring your compliance team is as resilient as it can be.
If you require assistance in the form of additional resource for your compliance teams, contact us today.