There’s no doubt about it: more is demanded of compliance professionals than ever before. And often against a backdrop of demanding regulations, skills shortages and business demands for faster controls. At the same time, there are a number of myths that make compliance unnecessarily difficult. In this article, we disprove the two most frequently heard misconceptions about compliance – once and for all.
Myth 1: It will always be necessary to bother customers with extensive, mandatory compliance checks
As a compliance professional you want to support the business as much as possible, while complying with laws and regulations. These two core tasks occasionally conflict with each other. This myth is probably a common topic of discussion between the compliance department and the business. At the same time, it is one of the most commonly heard misconceptions.
For the onboarding process, companies need huge quantities of information about new customers. This often means that customers have to provide extensive information themselves as input for compliance checks. This can result in delays and often an unpleasant initial introduction. No fewer than three-quarters of all compliance professionals say that delays during due-diligence audits negatively impact the customer experience.
These delays may be exacerbated by internal company policies, in particular the desire to obtain as much customer information as possible.
Accelerate your Customer Due Diligence check with external data
You can’t avoid CDD processes. But this does not mean that they can’t be done faster and more simply. By using external data, organizations can obtain a considerable part of the required information without bothering the customer. This ensures that questions can be limited to the information that is actually needed at that stage. This can greatly reduce delays and pressure on new customers. And meanwhile, you’re still collecting all the data you need.
Many questions can therefore be answered on the basis of information provided by third parties. Do you use current and verified data in real time in your compliance process? Then you can comply with domestic and foreign legislation.
Myth #2: Automation increases the chance of overlooking something
Automation puts an end to a certain degree of human intervention. And it’s only understandable that compliance professionals think that the more processes are automated, the greater the chance that relevant information will be overlooked.
The use of automation at each stage of the compliance program will free up more time for team members by identifying specific entities and their relationships, and screening them in terms of sanctions and reputational risks.
The advantages of automation:
- Put an end to administrative tasks such as manually monitoring the screening schedule;
- It helps in documenting compliance with official business programs;
- Considerably less time is needed to prepare for audits;
- Compliance teams can focus their attention on more complex, high-risk files. As a result, they are less likely to overlook crucial information.
A watertight compliance process in an efficient way
Automation does not mean switching to a process without any human intervention. It means that different levels of screening and automation are applied depending on the risk profile of each entity, so that the team remains focused.
Our industry-leading compliance solution, indueD, can help you achieve the unthinkable: mastering the complexity of compliance while delivering ethical business growth. With all the crucial insights needed for verification, screening and monitoring of relationships, IndueD ensures a clear and systematic due diligence process. Efficiently comply with laws and regulations and save both time and costs. In short: the solution to remain compliant and achieve rapid growth.
Compliance myths debunked: External data + automation is the golden combination
External data, and more importantly, automation, can thus be the solution for compliance teams to the growing number of challenges they face. This enables compliance experts to protect their organization and even add value to the business.
Of course, there are more myths about compliance than the two highlighted in this article. Curious to find out more? We have written a paper about it: “The ten most commonly heard compliance myths”. In it, we look in more detail at ten frequently heard myths surrounding the management of third-party risks, which often make compliance more difficult.