Technology can help the financial industry in Asia-Pacific prepare for the drive towards improving accountability from the top level of an organisation all the way down to the bottom says Gordon McKeown, head of audit, risk and compliance product (ARC) at software firm Ideagen. Here he explains how companies can manage and comply with new regulations.
With the IAC (Individual Accountability and Conduct) and MIC (Managers-in-Charge) regulations coming into effect this year for the financial sectors in Singapore and Hong-Kong respectively there has been a scramble to find a cost-effective system to manage the new compliance regulations.
Firstly, it must be understood that these new regulations are going to positively affect how businesses are run and managed by improving the working culture. The regulations coming into effect are much like the SMCR (Senior Managers and Certification Regime) which was implemented in the UK in 2016.
SMCR was introduced in response to enquiries after the 2008 financial crash. It is a set of regulations that was drafted up to tackle high profile banking scandals by creating a new culture in the sector that is centred around transparency and individual accountability.
This is done by encouraging financial service managers to be approved by regulators, involving checking all qualifications, competency and standards are met to ensure that those in these senior positions have the ability to do these jobs to the proper standard.
Taking responsibility
The aim of these regulations is to reduce potential harm to consumers whilst strengthening market integrity by producing a system that allows firms and regulators to hold people to account. It is intended to produce a working culture in the financial sector that will encourage staff to take personal responsibility for their actions, improve conduct at all levels and make sure firms and staff have a clear understanding of these areas of responsibility.
When SMCR came into effect in the UK there were some concerns about how the financial sector was going to be able to swiftly and legitimately comply with the new regulations. There were questions about how organisations were going to competently and clearly present evidence that the firms and employees were complying with the new standards, creating anxiety within the sector.
Auditing through spreadsheets was quickly seen as a time and cost draining solution not to mention that it required companies to hire new employees to maintain the system and it was error prone. These errors and discrepancies are something organisations in the Asia-Pacific region can learn from.
Technological support
There are innovative solutions available that make sure rule breaches due to poorly managed and maintained records systems are not an issue. This is where new system management software has really changed the tide in this struggle to easily manage an organisation’s compliance information.
One solution trusted in the UK financial sector is the Pentana Compliance software, created by the team here at Ideagen, one of the world’s fastest growing software firms. It is an automated compliance and accountability software which provides a user friendly and pinpoint alternative to more traditional ways of auditing compliance information on firms and employees.
Software, such at this, can easily map a whole organisation, providing a fluid, transparent and reliable system to maintain compliance with existing and upcoming regulations, including SMCR, IAC, BEAR (Banking Executive Accountability Regime) in Australia and MIC.
Tools like this can help organisations to identify senior managers’ responsibilities within the organisation and the qualification standards they need to fulfil their roles. What this means for organisations is that they have the ability to continuously monitor compliance from the top level of the organisation all the way down to the bottom, allowing a clear and concise overview of where responsibility is in each level of the firm.
This removes both the lost time and money that would be needed when using standard spreadsheet methods of recording compliance data, as well as removing the risk of failing to identify areas of compliance needed when new regulations come into force.
Moving forward
Innovative technology can help companies in the Asia-Pacific region manage and comply with new regulations quickly and accurately, especially financial services that are finding more traditional compliance auditing methods costly and tedious.
Moving forward, the pathway for the financial sector in the Asia-Pacific region is a positive one. The implementation of these regulatory measures should be seen as a way to step up productivity, become more ethical, improve competency, conduct and accountability throughout the organisation.
