Imagine not having to worry about whether auditors, regulators, or partners will find compliance missteps when they review your operations.
In the past few years, Predictive Analytics Group (PAG) has conducted more than 50 audit-prep exams, closed out more than 20 MRAs, worked on a dozen Consent Orders, successfully completed eight lookback or remediation exercises, and built 15 CMS organizations from the ground up for new startups. We offer peace of mind to our clients when regulators and auditors come to town.
Let’s face it, the Silicon Valley Bank and Republic Bank meltdowns sent shockwaves through the financial services industry and got the undivided attention of any industry that requires strong Compliance Management Systems (CMS).
(H4) Is Your House in Order?
As a result, we’re seeing a jump in companies reaching out to ensure their houses are in order. Whether you need to start a compliance program from scratch or do a review of your current program, we can help.
We have found that the most common issues come from the three line-of-defense (LOD) areas. Here are five tips for strengthening your compliance program:
- Define and Approve your Policies and Procedures (P&Ps). While this may seem simple, having a robust set of P&Ps in a regulatory-friendly format and approved by your regulator can be the key to avoid execution and detection errors in later steps.
- Create Process Maps to Identify Control Points. We often see well-documented P&Ps but the control points do not lead to the proper quality assurance routines. Since most of us are visual leaners, seeing your process defined in a process map helps you to easily identify key control points and put the right reports and checks in place. Being able to share these process maps with auditors and regulators is also incredibly valuable.
- Build your 3 LOD Team and Model. Your 3 LOD model must be defined with job descriptions, roles, and responsibilities, and required skills. When this step is skipped, the three lines usually conflict with each other or the overlap fails to effectively cover the broad range of review skills needed to effectively maintain a healthy 3 LOD organization.
- Define your Review Activities with an Audit Plan. We often see new clients have skipped the step of creating a well-documented Audit Plan that serves as a guide to ensure the right compliance-related activities are happening throughout the year in a timely manner. The Audit Plan should define each line’s role in the review process (i.e., what is reviewed, how many, when and by whom) with a degree of specificity that makes it a great document to share with regulators.
- Have some Form of Independent Review. Organizations who try to do all review activities in house often suffer from limited view and experience. We have found the most successful CMS organizations bring in outside parties to sanity check the system (and no, that is not designed to be a self-serving statement). The benefit is outside organizations that deal with clients of different sizes and across industries have a broader perspective on what works and what doesn’t.
If compliance concerns are keeping you awake at night, let’s talk. Don’t miss this opportunity to get ahead of the game and avoid costly fines, penalties, and distractions to serving customers.
