Regulation: a tool to help business practice?

Financial services businesses have long been enlisted by governments into the fight against financial crime and terrorist and proliferation financing.  But recent events in eastern Europe illustrate the increasing burden on businesses, with tightening economic sanctions.

Businesses are spending ever- increasing amounts to comply with the changing legal landscape, and to be able to demonstrate compliance to their regulators.  The penalties for non-compliance leave no choice.  This is exacerbated because the legislation is often far from universal: governments do not often have precisely the same interests.

To minimise the cost of compliance, Oben Regulatory, an international regulatory consultancy, says businesses should anticipate ad hoc changes to the requirements imposed upon them by different governments in a coherent, principles-based way, by investing in corporate governance and a risk management framework.  Businesses that do so will reap the dividends that a myopic focus on the ‘bottom line’ will not achieve.  Oben’s experience is that the root cause of most financial services businesses failures is a lack of corporate governance, accountability and control framework.

Ensuring compliance is potentially expensive (good resource is scarce) and disruptive. Recognising this, Oben advises on assimilating regtech, where appropriate, and has developed a range of IT-based solutions to complement its offering, which include bespoke e-learning modules, board effectiveness reviews and cultural and compliance assessments, with targeted surveys and output, as well as the packaging of real-time data.

Oben sees investment in governance solutions as a means of driving efficiency. Risk can be welcomed as long as it is recognised and mitigated within an appropriate framework.

Should you be interested in any of the matters discussed please contact a member of the Oben team.