The stakes are rising for organizations as regulators continue to crack down on misconduct and non-compliance, emphasizing the importance of proper compliance management practices.
According to Thomson Reuters, since 2009 the United States and Europe have imposed a combined total of $342 billion worth in fines on banks for misconduct, including violations of anti-money laundering (AML) rules.
Fines imposed by the Department of Justice and the Securities and Exchange Commission can cost companies millions, or in some cases, billions of dollars. In Q4 of 2020, Wells Fargo was fined $3 billion for fraudulent account openings and poor treatment of customers. Although this may be on the higher end of the spectrum, seven- to eight-figure fines are not unheard of. Not only can misconduct cause serious financial stress for an institution, but it can also result in loss of trust between the organization and its customers or members.
With the high stakes of poor compliance management, it is increasingly important for organizations to implement transparent, efficient, and automated processes. By adopting governance, risk, and compliance (GRC) technology, organizations can achieve greater effectiveness and efficiency, reducing the possibility of regulatory penalties and improving the ability to manage reputation risk.
GRC technology equips financial institutions to modernize their compliance program through automation, minimizing human error and improving resource allocation. Sound compliance management practices give organizations the peace of mind that they’re minimizing the likelihood of misconduct, managing risk, and boosting efficiency.