The majority of compliancy laws, no matter how complex they might initially seem, exist to ensure the safety of both the customer and the company in question.
In sensitive and high-value industries such as finance, these laws play a pivotal role in safeguarding transactions all over the world.
Failing to comply with the various regulations laid out by organizations (for example, GDPR, FinCen, SEC and many others) can prove to be devastating for financial companies, as they might need to deal with some extensive fines.
If you need to ensure you own company is sufficiently compliant, or you simply want to find out a little more about the critical part compliancy laws play in modern business, here are some important points to consider.
Table of contents
Defending from Cybercrime
Cybercrime is a slight on modern humanity—a very real threat that needs to be defended against.
Any business that operates online in any capacity needs to introduce dedicated security methods, and for the finance industry, this means utilizing the latest and greatest technology and techniques on offer.
Compliancy laws are in place to ensure that this happens, and that the measures used are effective deterrents in their respective situations. A KYC (Know Your Customer) approach is often taken by finance institutions to make this happen, and the right software integration can enable them to comply with the standing regulations.
Identifying customers and protecting them from fraudulent activity online is a big responsibility—but nonetheless essential—so methods like the KYC approach can be vital.
Monitoring Businesses
Financial companies that take part in criminal activities such as money laundering can be hard to detect without the right contingency plan in place.
Compliancy laws exist, in part at least, for this very reason, therefore aiding the detection and dismantling of criminal activity.
The fines for failing to comply tend to be huge as a result of this, and unfortunately, even honest businesses may end up suffering from a sanction if they are not careful.
Evolving Markets and Business Landscapes
As business evolves and market paradigms shift, so too must compliancy laws. New methodologies and technologies need to be monitored in order to make sure they do not exploit or harm the customer.
This is possibly one reason why compliancy laws tend to be so complex. It is not just the finance industry that needs to comply either; it is more or less every industry that operates today.
Protecting Your Employees
Employees need to be protected and cared for, too, and compliance laws can guide businesses on how to do so.
Whether this takes the form of practical safety regulations, or a policy in order to protect an employee in the event of a legal dispute, there are many different regulations to adhere to nowadays.
Even if it seems as though regulations exist solely to hinder your business, they are in fact, crucial to its longevity and security.
Ultimately, the repercussions for compliance failure in finance can be expensive and greatly damage your brand, so if you are unsure, it’s worth performing an assessment at the very least.
