Category: Financial Services

Start with a risk assessment. A risk assessment is a means of identifying the risks that your business faces and assessing the likelihood of them occurring. It also involves determining the controls you currently have in place to manage those risks, as well as whether or not any additional controls are necessary. When you are considering if your contractors are a compliance risk, look at their role, responsibility, applicable regulatory penalties and existing controls. We've looked at the need for more comprehensive risk assessments in previous posts, if you don't have sufficient resources to conduct such an assessment consider hiring a third party to do so. The formality of the controls should depend on the risks. There are no hard and fast rules. You should design controls to achieve your…

For an executive within an energy business, identifying a regulatory breach can be a gut-wrenching experience. Being told that your business has inadvertently breached the law, understandably raises concerns about the impact of the breach on your customers, stakeholders, and reputation. The obligation to report Businesses in various industries have obligations to report potential breaches to regulators. A failure to report a breach can itself be a breach, and such a failure will generally make matters worse. So businesses, including energy retailers, need to have clear processes in place to identify, assess, and report on potential breaches. Mandatory reporting obligations are found in various industries. Energy retailers operating in National Energy Customer Framework, for example, have reporting obligations under the AER's Compliance Procedures and Guidelines and further under s 273(2)…

Traditional mechanisms used by both government and private enterprises seeking to increase compliance focus on penalties as disincentives. Penalties take a variety of forms, including fines, loss of licence, and enforceable undertakings. In this post, we examine an alternative- focused on behavioural psychology and ‘nudge theory.’ Penalties as a compliance tool The belief that greater penalties will result in greater compliance assumes that regulated entities operate under a decision-making model which perfectly takes into account both the costs and benefits of each decision made and that resources required to ensure compliance are not limited.  Neither assumption is safe. The public’s responses to COVID-19 public health measures provide a perfect case study for the need for more sophisticated responses to encourage compliance. With fines in NSW increasing, have we seen greater…

The regulatory environment is evolving at a lightning pace. As a result, compliance officers must also keep up. To meet this challenge, AI applications have become more capable, particularly in regards to providing answers that are easy to interpret. As you might imagine, using an AI-powered system to process this data would be incredibly valuable for companies in a variety of fields—from financial institutions to insurance companies to tech firms. In compliance, the goal is to ensure regulatory compliance by identifying, evaluating and responding to regulatory requirements. The work can be challenging; firms and individuals often work in an environment without sufficient information to effectively meet goals and objectives. As artificial intelligence and automation become more prevalent in the world, it’s imperative that firms continue to utilize compliance know-how in…

The Australian Securities and Investment Commission (ASIC) has published a report (Report 685) on ASIC’s Regtech initiatives during 2019-2020. We’ve spoken previously about the benefits of advanced software when it comes to regulatory compliance. Compliance processes are generally complex. They have many moving parts, and the amount of time and money required to enact processes can be high. Compliance management systems such as the Compliance HUB can simplify these processes and save a business both time and money. The ultimate aim of products such as the Compliance HUB is to embed compliance into decision-making. Compliance management software can simplify compliance processes by streamlining and simplifying tasks, eliminating redundancies, and improving efficiency. For example, automation can be used to automate the review and approval of large quantities of documents. This frees…

Businesses around the world face challenges in managing regulatory compliance. Compliance requirements and the regulatory environment are constantly changing and there is no 'one-size-fits-all' solution. Companies are constantly faced with a balancing act between the risk of not complying with rules and the cost of having to comply with the rules. Companies are not the only ones that are affected by these challenges. They have a huge impact on the public sector and the general public. When it comes to investment in software, businesses typically start with a customer relationship management system and then sales and marketing software. Traditionally, compliance software is not considered a priority. Many businesses use excel spreadsheets to track their regulatory obligations. And yet, with the potential cost of non-compliance, is that an adequate approach? As…