Scott Tominaga believes that it’s very fast paced in the financial services industries and a mistake can be costly. It is exciting and ever evolving. The front office staff will sell to the clients and the middle and back offices will ensure that everything is in order.
Any sales related financial company will have its own compliance department or compliance-based services. A compliance department does exactly as it says on the tin. It makes sure that the company it supports is compliant to the legal and financial rules imposed upon it. It has five key areas of responsibility which are identification of any risk, prevention monitoring and detection of it. Plus, it would also resolve issues and offers advisory guidance to ensure that the same issue or mistake didn’t happen again.
A compliance department will identify risks that its organization or team might face. It would then design and introduce control measures to avoid these issues happening. This might involve training. It will then report on how effective these controls have been; then the final step is to put right anything that has gone wrong in terms of compliance.
The team is made up of compliance officers or advisors who will work with the management and advisors to manage any risk of non-compliance. This being the main function of their job. Their function is therefore to ensure that the organization’s internal procedures avoid compliance issues and measure any possibilities of them. This could also ensure that certain areas or products are checked to ensure that all rules have been followed when selling them. Financial products are covered by many laws and legislation and if they are not adhered to, to the letter, the company can be fined or even closed down. This will depend on the size of the business, the scale of the breach and the diversity and complexity of the breach. If the company can justify that the error was an oversight due to the very technical nature of the product and client’s wants, this can make things a little better for them.
A compliance department is crucial for companies offering financial services. Some examples could be unsecured personal loans providers. In the UK and in the USA regulations are trying to protect vulnerable consumers from credit traps. Some authorised lenders have in-house compliance officer that ensure they operate according to most recent regulative requirements. Equally important is the data protection and online safety. Standards like GDPR were designed to protect consumers from becoming a victim of frauds. You can apply here if you are looking for a personal loan online from an authorised direct lender.
In Financial Services compliance officers will check that products sold have met the client’s objectives and that they match their level of risk. They will basically ensure that the product sold can and is justified to the client, that other equally suitable products have been eliminated and clarification has been given as to why that is the case; the advice given needs to be fair, beneficial and clarified to the customer.
The aim of the regulatory bodies is to encourage people to trust financial advisors and rely on them for good advice if they have any money to invest. The last decade has seen the biggest increase in the importance of the compliance role. It now will take new laws and use them to make procedures and policies for their company, to ensure that the rules aren’t broken. The most successful businesses have strong risk cultures. The whole team have to be prepared and ready to change their methods if the compliance department and manager deem it necessary.
The compliance team will thoroughly understand every aspect of the business and its dealings. They will also deal with issues such as money laundering and risk culture management.