In the dynamic landscape of banking, the synergy between compliance
functions and strategic decision-makers plays a pivotal role in shaping the
client experience. This article delves into the transformative potential of
aligning compliance and strategy to enhance customer satisfaction, navigate
evolving markets, and fortify institutions against unforeseen challenges.
The Missed Opportunity:
Often portrayed as adversaries, compliance and strategy teams stand to gain
immensely from collaboration. As technology promises innovation, new risks
emerge on uncertain economic and geopolitical fronts. The success stories of
banks underscore the missed opportunity for strategic advantage when compliance
and strategy operate independently.
Unlocking Competitive Advantage:
Collaboration between compliance and business leaders can significantly
impact two key strategic objectives: differentiating client experience and investing in fast-evolving areas.
Differentiated Client Experience:
In today’s digital era, where customer experience is the cornerstone of
competitive advantage, the collaboration between compliance and business
leaders becomes instrumental in crafting a client-centric approach. This
partnership aims to streamline processes, eliminate friction points, and
ultimately enhance the overall customer journey.
Consider retail banking and payments, where identity verification processes
often pose challenges for consumers. These processes can be time-consuming and
confusing, leading to negative experiences. By fostering collaboration,
strategy teams with expertise in customer needs can work hand-in-hand with
compliance teams to identify critical needs and seamlessly embed compliance
requirements into customer journeys. This not only enhances user experience but
also ensures adherence to regulations.
In institutional banking, the intense and sometimes redundant queries for
information related to complex know-your-customer (KYC) requirements can
frustrate clients. Closer collaboration between compliance and strategy teams
allows banks to simplify this process in a client-centric and risk-informed
manner. The result: a significant improvement in customer satisfaction scores
and a reduction in administrative touchpoints.
Initiating a review of priority client-facing processes serves as the
starting point for collaboration. Cross-functional teams, comprising experts in
compliance, technology, operations, strategy, and other functions, can work
together to identify opportunities for improving user experience through
simplification or rationalization of controls. This inclusive approach ensures
that compliance requirements are seamlessly integrated into customer journeys
from the outset.
Investment in Fast-evolving Areas:
As financial institutions explore growth opportunities in rapidly evolving
domains, compliance becomes a crucial partner in shaping strategies. As such, it becomes important to understand how collaboration can help institutions navigate compliance
uncertainties related to data and analytics and capitalize on emerging trends
in environmental, social, and governance (ESG) offerings.
Institutions considering investments in or partnerships with data and
analytics players face new and sometimes uncertain compliance expectations. For
instance, when utilizing AI algorithms for credit decision-making tools, compliance
teams play a pivotal role in ensuring the fairness of decisions and compliance
with customer protection rules. Collaboration between compliance and strategy
teams can inform assessments of these requirements, including the necessary
investments in controls and AI talent.
The growing interest in environmental, social, and governance (ESG)
offerings also presents both opportunities and challenges.
Collaboration between
compliance and strategy teams is essential in designing transparent and
compliant processes for creating and maintaining ESG investment products.
Compliance teams, working alongside strategy teams, provide insights on
aligning ESG factors with declared investment objectives, regulatory guidance,
and processes for monitoring product performance.
Collaboration on articulating the largest regulatory risks associated with
new or growing segments is a key starting point.
Compliance and strategy teams
can work together to identify potential regulatory challenges and implications
for the institution’s planned investment actions. By explicitly designating
compliance team members for strategically informed compliance insights,
institutions can proactively address compliance considerations in areas
earmarked for potential growth or investment.
In both areas, the key is to foster an environment where compliance and
strategy are not just aligned but actively collaborate, leveraging their unique
strengths to drive innovation and sustainable growth. This collaborative
approach ensures that compliance considerations are seamlessly integrated into
strategic decision-making processes, yielding a differentiated client
experience and informed investments in fast-evolving areas.
Conclusion:
Banks have a significant opportunity to revolutionize client experiences by
fostering collaboration between compliance and business strategists. While
quick wins are possible, sustained impact requires a thoughtful approach to
building systems, processes, and foundational capabilities that enable scalable
collaboration.
In the dynamic landscape of banking, the synergy between compliance
functions and strategic decision-makers plays a pivotal role in shaping the
client experience. This article delves into the transformative potential of
aligning compliance and strategy to enhance customer satisfaction, navigate
evolving markets, and fortify institutions against unforeseen challenges.
The Missed Opportunity:
Often portrayed as adversaries, compliance and strategy teams stand to gain
immensely from collaboration. As technology promises innovation, new risks
emerge on uncertain economic and geopolitical fronts. The success stories of
banks underscore the missed opportunity for strategic advantage when compliance
and strategy operate independently.
Unlocking Competitive Advantage:
Collaboration between compliance and business leaders can significantly
impact two key strategic objectives: differentiating client experience and investing in fast-evolving areas.
Differentiated Client Experience:
In today’s digital era, where customer experience is the cornerstone of
competitive advantage, the collaboration between compliance and business
leaders becomes instrumental in crafting a client-centric approach. This
partnership aims to streamline processes, eliminate friction points, and
ultimately enhance the overall customer journey.
Consider retail banking and payments, where identity verification processes
often pose challenges for consumers. These processes can be time-consuming and
confusing, leading to negative experiences. By fostering collaboration,
strategy teams with expertise in customer needs can work hand-in-hand with
compliance teams to identify critical needs and seamlessly embed compliance
requirements into customer journeys. This not only enhances user experience but
also ensures adherence to regulations.
In institutional banking, the intense and sometimes redundant queries for
information related to complex know-your-customer (KYC) requirements can
frustrate clients. Closer collaboration between compliance and strategy teams
allows banks to simplify this process in a client-centric and risk-informed
manner. The result: a significant improvement in customer satisfaction scores
and a reduction in administrative touchpoints.
Initiating a review of priority client-facing processes serves as the
starting point for collaboration. Cross-functional teams, comprising experts in
compliance, technology, operations, strategy, and other functions, can work
together to identify opportunities for improving user experience through
simplification or rationalization of controls. This inclusive approach ensures
that compliance requirements are seamlessly integrated into customer journeys
from the outset.
Investment in Fast-evolving Areas:
As financial institutions explore growth opportunities in rapidly evolving
domains, compliance becomes a crucial partner in shaping strategies. As such, it becomes important to understand how collaboration can help institutions navigate compliance
uncertainties related to data and analytics and capitalize on emerging trends
in environmental, social, and governance (ESG) offerings.
Institutions considering investments in or partnerships with data and
analytics players face new and sometimes uncertain compliance expectations. For
instance, when utilizing AI algorithms for credit decision-making tools, compliance
teams play a pivotal role in ensuring the fairness of decisions and compliance
with customer protection rules. Collaboration between compliance and strategy
teams can inform assessments of these requirements, including the necessary
investments in controls and AI talent.
The growing interest in environmental, social, and governance (ESG)
offerings also presents both opportunities and challenges.
Collaboration between
compliance and strategy teams is essential in designing transparent and
compliant processes for creating and maintaining ESG investment products.
Compliance teams, working alongside strategy teams, provide insights on
aligning ESG factors with declared investment objectives, regulatory guidance,
and processes for monitoring product performance.
Collaboration on articulating the largest regulatory risks associated with
new or growing segments is a key starting point.
Compliance and strategy teams
can work together to identify potential regulatory challenges and implications
for the institution’s planned investment actions. By explicitly designating
compliance team members for strategically informed compliance insights,
institutions can proactively address compliance considerations in areas
earmarked for potential growth or investment.
In both areas, the key is to foster an environment where compliance and
strategy are not just aligned but actively collaborate, leveraging their unique
strengths to drive innovation and sustainable growth. This collaborative
approach ensures that compliance considerations are seamlessly integrated into
strategic decision-making processes, yielding a differentiated client
experience and informed investments in fast-evolving areas.
Conclusion:
Banks have a significant opportunity to revolutionize client experiences by
fostering collaboration between compliance and business strategists. While
quick wins are possible, sustained impact requires a thoughtful approach to
building systems, processes, and foundational capabilities that enable scalable
collaboration.