Regulatory compliance in financial services is changing all the time so, what compliance regulations should you be aware of and implement right now?
Regulatory compliance in financial services is essential to protect consumers and financial institutions.
In 2008, the U.S. went through a major financial crisis that resulted in huge regulatory changes for the financial services sector. Businesses that engage in financial activities now face an ever-changing regulatory landscape full of complex requirements. Regulatory compliance in financial services is not only critical to avoid fines and legal punishment but also to secure the good reputation of your brand.
There are many financial regulatory compliance issues businesses engaged in financial activities must consider today. From new consumer laws to cyber attacks and safeguarding sensitive data, it’s essential that any business engaged in any kind of financial activities understand new financial services compliance issues and compliance regulations.
Top Regulatory Compliance
Let’s take a look at some of the regulatory compliance in financial services today.
Sensitive Data
One financial compliance regulation financial institutions must be aware of today is their responsibility to safeguard sensitive data. Financial institutions are responsible for a lot of financial and personally identifiable information that requires special handling. Financial compliance frameworks like HMDA, PCI-DSS, SOX, and GDPR set compliance regulations that call for specific processing, storage, and security practices to safeguard the sensitive data financial institutions keep on their customers. Regulatory compliance in financial services is designed around data privacy and security to keep customer data safe.
Cybersecurity
Financial services companies hold a lot of sensitive and valuable data making their institution’s prime targets for cyber attacks. New financial regulatory compliance laws look to cut down on these attacks by introducing regulatory standards, technologies, and guidance. Financial compliance begins with comprehensive risk assessment planning and strategies that protect digital assets and improve responsiveness to cyber attacks.
Consumer Laws
Another regulatory compliance in financial services is the ever-changing consumer laws. The Home Mortgage Disclosure Act (HMDA), the newly introduced consumer compliance law that took effect in January, asks that financial institutions improve the quality of data reported as its primary objective. Financial services compliance seeks to help safeguard consumer data and ensure that data doesn’t fall into the wrong hands.
Risk Management
When it comes to regulatory compliance in financial services, real-time calculations are needed to comply with risk management regulations. Since calculating risk has long been a manual process, to keep up with new compliance regulations, financial institutions need to implement some level of automation to avoid violating financial compliance laws. By implementing automation, financial institutions will be able to keep up with changing financial regulatory compliance laws and be able to track, timestamp, and recall specific data points giving them the much-needed transparency they must have to stay compliant.
Reporting Standards
Recording information is vital to financial services compliance but the method of recording required depends on the country the business is operating in. Since every country has different compliance regulations when it comes to recording data, it’s essential that financial institutions streamline the way they record data in order to be able to consolidate all of their data and meet all regulatory compliance in financial services when it comes to reporting standards.
Conduct
More regulatory compliance in financial services is focusing on efforts to operationalize a measurable conduct risk management frameworks. New compliance regulations concerning conduct seek to prevent misconduct by establishing strong controls that include continuous governance, oversight, and monitoring. Financial regulatory compliance demands that financial services companies have proper regulations in place to avoid misconduct practices to not only protect their customers but themselves as well.
Regulatory compliance in financial services is changing all the time to keep up with new issues and our changing culture. Compliance regulations must be put in place to help further protect consumers and banks alike.
