The financial world faces more and more regulations with every passing day. This adds a lot of stress and burden on organizations to keep up with the pace of changes and comply with evolving regulations. we are facing compliance challenges organizations in 2020.
Compliance Challenges in 2020
With the concept like data processing, divergence in regulatory obligations, operational resilience, financial crime etc. coming in picture, 2020 calls for a more user and technology-centered strategies. It is important for organizations to understand these hot topics and work accordingly to avoid repercussions pertaining to non-compliance. Here are top 5 compliance challenges organizations will be facing in 2020 and beyond:
Divergence in regulation
Considering the divergent nature of regulations due to local and global needs, it is important for financial organizations to understand and embrace these in order to act in accordance with their demands. It is imperative for firms to learn and adapt to the strategies of local as well as global regulations in order to avoid any possibility of non-compliance. Some of the main areas of divergence are data privacy regulation, cybersecurity, student loan servicing, alignment with non-financial services federal regulators, innovative technological applications where new regulations may emerge among others.
The quality of data and the way data is handled are two of the most important aspects when it comes to protection of operational information. Even though financial service providers know that data is to be protected, it is continuously captured, processed and shared. However, one cannot escape the reality that breaches in data sharing continue to remain, therefore the expectations for more strict policies on data privacy and security are increasing in both local and global front.
Business should be capable of adapting to changing environments for the sake of regulatory compliance. Firms need to operate an integration approach which should take all kind of risk in consideration. They need to be aware of the fact that external factors such as cybercrimes, sociopolitical changes might pose threats to the functioning of an organization and therefore should be prepared for them as well.
Efficiency of compliance processes
Change and efficiency are the two most important drives of compliance processes. With the use of technological improvements, firms are required to adapt to emerging risks and transformations as quickly as possible. Constantly educating themselves on existing compliance challenges and adapting to an efficient compliance process can be difficult for financial companies.
Financial services need a model based on a personalized service experience, data privacy and fair value in order to build a loyalty-based relationship with their customers. They should be well-versed with the regulations related to personal data protection in order to deal with the privacy concerns of digital era.
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