Compliance Resilience – What’s New?

Over the past 15 years I have worked in both the private and public sector, starting out as a Project Worker for a Housing Association supporting vulnerable adults, working in Finance for a Blue-chip company and large media corporate, before joining the Insurance sector 10 years ago.  My decision to qualify as a Management Accountant was driven by a desire to understand what makes a business tick.  It was during my roles within Business Operations and Change that I found myself increasingly curious about the people aspect of organisations and lead me to enrol on a Master’s in Management & Organisational Dynamics.  This involved examining the culture of organisations and the subsequent impact of culture upon personnel (and vice-versa).  I find organisational life so to speak, fascinating, due to the unconscious factors at play.  Likewise with Compliance Resilience, our mentality toward it will invariably impact upon the way in which we as personnel, along with the wider business, respond to it, either facilitating or hindering compliance and sustainable growth practices.  

Now, in my role as Operations & Transformation Consultant with GreenKite Associates, we support new start-ups and established players within the Insurance market, and explore questions such as, ‘What does Compliance Resilience really mean in practice?’, ‘Why waste your business resources on simply being compliant?’, and the reality that ‘there is no one size fits all but that’s not necessarily a bad thing!’  

This article compliments the latest webinar in GreenKite’s series on Growth, Resilience and Everyday Operational Excellence.  Check it out on YouTube here

Introduction

Irrespective of whether we wear a Finance, Operations, Actuarial , IT, HR, or Audit ‘hat’ as part of our day job, as professional people working within the Insurance market, we expect, and have become accustomed to conducting ourselves within a set of regulatory parameters.  We also recognise that such regulatory requirements placed upon businesses and its personnel will inevitably continue to evolve in response to lessons learnt by the market and regulatory bodies such as the FCA, PRA and/or EIOPA.   

Importance of the topic 

So, we’ve established that regulatory bodies and these requirements are here to stay.  Yes, businesses need to comply within the relevant timeframes set out in legislation but there is often a degree of interpretation involved.  Instead of viewing regulatory requirements as simply a stumbling block to good growth for your business, why not try viewing them as an opportunity to take a more pragmatic approach?  Why not tailor your responses to the needs of your business and its customers (wherever possible?)  

What does Compliance Resilience really mean in practice? 

One of our webinar panel experts Maurice Rose descripted it as, ‘the ability to operate under severe but plausible scenarios’.  In other words, the capacity for a business to remain regulatory compliant within the environment it currently operates (and/or a scenario it may be forced to adapt to).  Operational Resilience for example is about much more than a business having a Business Continuity Plan document (BCP), it relies heavily upon the cross-functional effort and engagement of personnel across the business.  Likewise, Compliance Resilience can only be achieved by it becoming an intrinsic part of the business culture and mindset of its personnel. 

Why waste your business resources on simply being compliant? 

The majority of professional people want to do a good job, take pride in their role, and will step up given the opportunity to demonstrate their skill and/or experience.  Surely, businesses are missing a trick if they are not utilising their people to look beyond today’s compliance requirements.  This approach and mentality is short sighted and will likely lead to a negative impact upon the morale of personnel as well as restrict the growth potential of the business.    

We are all in this together

As cliche as this may sound, it’s true.  It is time to move on from the ‘us’ and ‘them’ mentality because a shared goal and team effort is the only way any business can achieve Compliance Resilience.  That said, businesses need to be careful when coordinating input from across the business to avoid assumptions along the lines of, ‘IT own x and risk own y’.  Above all, Compliance Resilience cannot be achieved in a vacuum. 

There is no one size fits all……..but that’s not necessarily a bad thing! 

Over the past 15 years, I have worked for larger private sector corporates such as IBM, Thomson Reuters, and Travelers Insurance, as well as smaller public sector entities such as Flood Re.  Irrespective of the size of the business, communication has always remained key to any successful initiative and Compliance Resilience is no different.  Make sure cross-functional effort is aligned to the overall direction of the business and avoid duplication of effort. 

What approach and recommendations do I (and GreenKite) share with new clients?

• Of course, make sure you‘re regulatory compliant but do not approach this genuine opportunity with a ‘tick box’ mindset, because that is all it will ever mean to your business and personnel. 
• Cross-functional consultation and brainstorming will be key (.e.g. between operations and UW when establishing compliance reporting criteria).  There should also be value in what the business is doing if there isn’t, question why those tasks are being done. 
• In terms of growth, listen to the client and embrace their enthusiasm as an entrepreneur for instance.  An important part of my role is to constructively challenge the client, and make sure they can back up their story/promise (.e.g. with evidence of compliance to investors, management, or the Board).   
• Consider the longevity of the business and the direction the owners wish to take it in.  There will be numerous ways to get there, so avoid focusing on a single path to achieving it.  If the past 18 months has taught us anything it is to make sure we have multiple options available to remain operating as a viable, sustainable, and ethical business. 
• Do not be afraid to periodically review the direction of the business (.e.g. annually).  Revisit your 3-5 year plan in light of the progress made since the last review.  Likewise, if there have been any significant macro-environment changes during that period. This is a healthy way to avoid general pitfalls to successful growth, including those stemming from a change in the compliance landscape.   

In my experience, those firms who consciously approach regulatory compliance with a pragmatic and positive attitude and give their personnel sufficient time each month or quarter to complete their due diligence, do reap the benefits discussed above leading to sustainable business growth and increased engagement from its personnel.

To find out more about GreenKite’s Growth Resilience & Everyday Excellence webinar series and to sign up to our next webinar — People & Operational Resilience — Covid & Beyond visit our Resilience page