Managing compliance in the financial industry is a complex, ongoing challenge, especially when it involves multi-state or global operations. The risks of non-compliance, such as delayed background checks or inadequate monitoring of employee qualifications, can lead to significant regulatory penalties. For example, a financial institution was fined $1.25 million by FINRA for delays in conducting background checks, and a UK broker faced a $150,000 fine from the U.S. National Futures Association for failing to comply with testing regulations.
The process begins with ensuring that new hires meet all regulatory requirements, but it extends far beyond that initial step. Maintaining employee qualifications—such as license renewals and ongoing education—is an ongoing responsibility that becomes more complicated with operations spread across different regions, each with its own set of regulations.
Additionally, firms must track and manage updates to employee data, such as changes in address or job roles. This can be particularly challenging when relying on outdated systems or manual processes, which can lead to delays and compliance gaps. As Sinead Egan, Product Manager at MCO, highlights, outdated methods for updating and tracking employee data can cause critical updates to be missed, exposing firms to regulatory risks.
To navigate these challenges, firms need to manage multiple compliance components, including the tracking and updating of licenses, registrations, and exams, ensuring these are up-to-date across all jurisdictions. The use of disparate tools can create inefficiencies and lead to oversight gaps. Automation offers a solution by streamlining these processes, allowing employees to handle compliance responsibilities more effectively and freeing up compliance teams to focus on strategic, rather than administrative, tasks.
An integrated approach that combines compliance technology with HR systems, such as Workday, can minimize errors and prevent duplicate efforts. A unified platform managing licensing and other compliance activities provides a comprehensive view of an employee’s compliance status, enabling timely interventions to address any lapses or discrepancies. This integrated system not only simplifies data management but also enhances a firm’s ability to proactively identify and resolve compliance issues, thus mitigating the risk of penalties and improving overall regulatory adherence.
Source: fintech.global
