When two years ago Thomson Reuters Regulatory Intelligence asked financial-services firms which was the greatest compliance challenge they expected to face in 2020, most of them answered “keeping up with regulatory change”. Despite the question was submitted long before the COVID-19 pandemic had become apparent, the cost of regulatory compliance was already a big issue. It’s not surprising. Compliance became a big thing soon after the 2008 financial crisis, and regulations have been changed many times since then, aiming to get both financial stability and good customer outcomes.
Thus, in the last decade, companies have been struggled to allocate budget appropriately to face the increasing cost of compliance as well as the required investments in risk management, technology and compliance teams. As reported by the aforementioned survey, more than a third (34%) of firms choose to outsource some or all their compliance functionality (up from 28% in 2019). This trend can make your company save time, money and get new clients more easily.
The current scenario.
In its Global Crisis Survey 2019, Pwc reported that 69% of business leaders have experienced a corporate crisis in the last five years and still 29% of companies have no staff dedicated to crisis preparedness. Nowadays, this is unacceptable. COVID-19 pandemic, climate risk and technology are challenging companies to improve their compliance skills. And if there is anything we have learned from 2020-2021, it’s that costs of non-compliance can be much higher than the cost of compliance.
The emergency and the state of crisis have partially compromised the previous competitive structures and balances. But on the bright side, today it is possible to create new services, take advantage of new possibilities of interacting with the customer, develop and use more rapidly technologies and methods of distributing products and services. Your company is expected to be a safe place also online, to be responsible and sustainable, and to invest in the welfare of employers and customers.
The next step.
Mark Steward, executive director of enforcement and market oversight at the UK FCA, stated that we need less hindsight and more foresight. And he’s right, we all must learn from the past, invest in the present and build the future.
Compliant journey fixing your contract onboarding flow
To make sure your contracts are always compliant with regulations and performance of obligations within the agreement it’s not enough to have a stage dedicated to checking compliance. You have to keep this goal in mind during the whole contract management process.
In order to do this contract management platforms like Trakti can help you in various ways: by storing a depository of contract templates to adjust in every specific case; by establishing and automatically monitoring goals and performance indicators; by including a review function that lets you send a contract draft or a deal proposition to a reviewer (may this be a member of your legal department, a supervisor or an external reviewer); by keeping all your contracts in one place, safely stored; by including some flexibility into your smart contract (to know more about how to embed flexibility in smart contracts you can read this article); and finally by tracking each stage of your contract lifecycle.
Trakti is a unique and compliant platform, that helps your company to meet the need of:
- SECURITY. A third (34%) of respondents of the Thomson Reuters Regulatory Intelligence survey said they had turned down a potentially profitable business opportunity because of culture and or conduct risk concerns. Trakti uses cryptography for both storage and transmission of sensitive data, the transaction is secure and hosted by Stripe servers, all data are securely stored on the Amazon Web Services. Moreover, it is integrated with KYC and AML to protect your company from potential risks.
- SUSTAINABILITY. Climate change is a big issue for our planet. Trakti streamlines your deals from start to end, signature and payments included. This means no more printed contracts or in-person meetings.
- TECHNOLOGY. Another compliance challenge is to deal with online smart workers, without losing time and control. Trakti helps you to create your own process models and define your specialized data model aligned with your industry standard, create online workgroups to connect contract managers and operational leaders and finally publish smart legal contracts only when approved by the line manager and legal representative.