IDG CONNECT: Cognizant’s Vice-President of Banking and Financial Services in the UK and Ireland Says Regulatory Compliance for Financial Services is Akin to Road Maintenance

“As financial institutions race to meet constantly changing regulatory compliance, there is a danger the flow of demands are seen as a tick-box exercise, rather than building a sustainable platform to deal with future compliance requirements,” writes Tony Virdi. “Whether AIFMD, MiFID or CRD, regulations are highly specialized and there is a constant stream of new directives that have to be met, leaving compliance officers with a never-ending list of tasks to complete to appease the regulators. What this checklist does not address, however, is the long-term planning that banks and financial services enterprises need to undertake in the regulatory race, including the need to bolster systems/teams to ensure sufficient resources are in place.”

Virdi believes that there are lessons to be learned from the world of road maintenance. “For the banking and financial services sector, it should not be a matter of fixing things only when they are broken (or, in the business world, meeting regulations on an ad-hoc basis). The focus should be on preventing the need for road works or maintenance on an ongoing basis. The financial industry should be looking ahead to future requirements, keeping abreast of new routes and roads, both those being planned currently and also anticipating those that might be needed.”

According to Virdi, the principle of urban crowdsourcing in road maintenance can be applied to the regulatory environment. “The crowdsourcing element involves asking the industry for proposals for what are called Road-Works Issues or RWIs,” he writes. “In the same way that Boston residents can provide feedback on road maintenance and other issues, our industry can plan for the future and its ‘roadmap’ by crowdsourcing our own priorities. Only by knowing where the hotspots and congested areas are in the road ahead can banks and financial services enterprises take more of a long-term view to achieving regulatory compliance.”

Virdi adds, “It is true that banks will be differentiated by their level of customer experience rather than compliance. Nevertheless, continuous piecemeal changes to systems and processes may end up impacting the customer experience. Hence regulatory compliance should not be a seen as a tick-box exercise but rather an opportunity to review and vet the health of an organization and consider the future needs, as one might the road infrastructure of a country.”

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