Why companies should prioritise compliance during a worldwide pandemic?

By Manish Shah, Vice President for Southeast Asia, Customer Engagement Solutions at Verint Systems.

Financial institutions around the world are facing greater operational and compliance risks with the emergence of the recent pandemic, Covid-19. Financial authorities and organisations everywhere are acknowledging these difficulties with the US Securities and Exchange Commission offering relief and guidance to registered funds and their investment advisers. In the EU, financial authorities have provided initial guidance to ensure continuity of business under financial stress.

In Singapore, the Singapore Exchange (SGX) has rolled out an $5m care package to provide support and relief measures amid the outbreak. The SGX care package will benefit Singapore-listed companies as well as SGX employees and contract staff. The move was introduced by the financial community to reinforce the city-state’s resilience as a global marketplace.

According to a Verint whitepaper, Financial Compliance in 2020: Asia Leader’s series, the Singaporean government is recognised by the industry at large as being particularly supportive of proven financial regulatory technology (Regtech) offerings. By contrast, the UK government, was found to be comparatively reluctant to promote Regtech offerings, tending instead to identify issues without offering specific solutions.

It is expected that Singapore will continue to live up to its reputation as a first-class financial hub during this time and is showing every sign of being committed to ensure uninterrupted operations. The city-state is taking the global lead to proactively manage the Covid-19 situation by supporting people who are putting their lives and jobs at risk, as well as helping companies survive while maintaining compliance with regulations, even when they are focused on unprecedented events that are changing operating business models forever.

Compliance must be prioritised in these troubling times

To cope with the current demands of Covid-19, Singapore banks have unveiled packages to help companies and other customers with relief assistance to help tide them over the impact of the Covid-19 outbreak. These packages are aimed at helping small and medium-sized enterprises (SMEs) to ensure business continuity while maintaining their standard financial operations.

Banks like OCBC are mitigating the fallout from the outbreak by helping their partners see through this challenging period in their business operations and by maintaining their quality and compliance. Multinational banks like Standard Chartered are currently introducing measures for clients who ask for financial assistance to cope with these challenges.

DBS also unveiled a second round of relief measures to help businesses in Singapore cope amid the virus outbreak, encouraging companies to go digital. These measures include financial relief packages and digital initiatives for companies to fast-track their digital adoption and rely less on physical processes. As workforces shift to remote-working, DBS has prepared its back office and deployed home agents to assist with the expected increase of more customers online.

The top concern for most companies is ensuring consistent cash flow to cover ongoing operating costs when revenues are under pressure. These measures include extending the due date of the affected business’ trade finance bills as well as extending bridging loans in the form of more working capital financing to affected businesses.

However, as the banking sector does what it can to mitigate the fallout from Covid-19, there are still many competing priorities for leaders to juggle. In all of this, compliance must not be forgotten. Data quality, reporting accuracy and timeliness cannot be compromised no matter the circumstances. Centralised governance procedures must be in place, including documenting and clearly articulating decisions by authorised personnel if faced with potential variations from ordinary levels of monitoring and control due to the global crisis.

How can companies continue to champion compliance during times of crisis?

Leaders must navigate these challenging times without compromising a focus on compliance. Here is our five-point action plan for any leader juggling business survival and compliance:

• Make Compliance a centre piece in your business continuity plans (BCP). As you build your BCP ensure that you factor in how you will manage compliance remotely, what security will look like and how you will continue to meet your obligations in these unprecedented times.
• Prioritise the compliance conversation even in times of chaos by engaging with compliance staff and understanding the processes instead of dismissing them as just another round of work or as something that can wait until later. Keep compliance visible.
• Adopt regulatory technology solutions (RegTech) that can help your enterprise achieve and maintain financial compliance, better serve your customers while gaining your business a competitive edge.
• Embrace automation as it can ease the burden of expanding and often stringent and demanding regulations, freeing skilled staff from low-value, repetitive tasks an improving reliability and performance. Automation is also key as businesses shift to remote workforces.
• Continue to train employees with the right skills, information, tools and mindsets for them to understand compliance and what role they play according to their geographic boundaries now and into the future.
• Adopt a coordinated approach with clearly defined rationales and targeted timelines to effectively practice compliance and ensure it is not lost in the conversation. This is necessary for audits, regulator inquiries, market stability and health crises.

The best way to protect your business from future compliance risk is to do everything that you can to ensure that compliance remains active, visible, and assertive during the current crisis. This way, you can ensure that your organisation is well-positioned to successfully tackle the post-Covid-19 wave of business activity.

Disclaimer “This article first appeared in the Singapore Business Review here.”