Maintaining Compliance In A Changing Environment

Navigating the regulatory environment can be a dizzying experience. Businesses' path to growth can be obscured by emerging laws, fear of overregulation, and insights gained from litigation. Just as business growth propagates compliance risk, compliance risk impedes business growth. How your organization balances the two will impact your success in this new and evolving environment.

Maintaining compliance can be a multifaceted challenge. Simply keeping up with the introduction, passage, and subsequent amendment of state and federal laws can be taxing for a business and its responding operational units. Adding the element of regulatory oversight (eg exam and audit) further intensifies compliance impact on the business' operation. As the business introduces new products and services or enters new markets, compliance adherence becomes further complicated.

Greg Neeser
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Growth Yields Compliance Risk

Naturally, a growing business must evolve to keep pace and meet new goals in a timely fashion. Often, this results in a distributed and isolated operational environment that may be highly effective at objective fulfillment, but which also carries the baggage of knowledge isolation, decreased cross-function communication and ultimately a reduction in collaborative learning. Adhering to compliance obligations in such a complex operational environment introduces a heightened level of compliance risk to the business.

As the regulatory environment and the business operation continue to change, internal communications are also evolving. Increased regulatory pressures shift the focus of legal and compliance personnel to regulators and outside counsel while operational fulfillment groups double down on daily work and remediation of compliance policy changes. As this communications gap widens, legal and compliance groups become further separated from the operational business units responsible for policy remediation and implementation. Concurrently, operational units become inwardly focused on balancing daily functions with the scramble to find the resources and capability to respond to ever-increasing compliance demands.

The Operational Compliance Solution

Given all the complexities of the modern regulatory environment, how can operational fulfillment teams continue to power a business’ growth while also maintaining proper compliance? The answer is Operational Compliance. Establish an interrelationship between the legal and compliance groups and the operational fulfillment teams in order to operationalize compliance policy, monitor its impact, and reduce compliance risk for the business.

Positioned as a cornerstone between the regulatory and fulfillment groups, Operational Compliance creates a foundation for operational scale, collaborative interaction, knowledge sharing, and process improvement in compliance policy remediation. It understands the various compliance risks and the potential impact those risks introduce to the operation. By connecting compliance policy changes to the operational fulfillment groups, it maintains a pulse on compliance risk impact and policy adherence. Organization is introduced to the process, resulting in improved remediation prioritization, risk assessment, communication efficiency, and reduction in noise and duplication of effort.

Succeeding with Operational Compliance

Key components of a successful Operational Compliance program include the proper placement of the group within the business and resource selection. Because this group is focused on fulfillment of compliance policy change, it belongs within the operational structure of the business and not within legal or compliance reporting lines. This group needs executive sponsorship to ensure its function is supported throughout the business and related operations, along with experienced leadership to drive its purpose.

Selection-of-resource is fundamental to program success. Operational Compliance must have resources who possess a deep and broad knowledge of product, business operations, and the applicable regulatory rules and guidelines that govern those products and processes. Though these resources are not (necessarily) attorneys or core operators, they maintain a keen understanding of both environments and have an effect on both. Their presence allows the regulatory groups to focus on emerging compliance issues and operational groups to focus on fulfillment of those issues. They are relationship people, interacting with a broad set of personalities, including business leaders, attorneys, regulators, project managers, operational resources and even programmers/developers. These resources typically emerge from within the business, bringing a solid understanding of operational process, resource assignment, and exposure to compliance-related issues.

Many organizations employ an open-communications flow where multiple resources from the regulatory groups interact with multiple resources from the fulfillment groups. Though some may find this approach to be efficient, it does not scale, nor does it optimize operational efficiency. Channeling communications through Operational Compliance ensures right-party contact between the regulatory groups and the fulfillment groups as well as reducing operational noise and clutter otherwise present in an open communications environment. The goal here is to ensure the right requests are being made of the right party in order to satisfy the compliance policy issue. Operational Compliance is best positioned to ensure these lines of communication are held as the regulatory environment and the responding operational business units continue to change.

Moving Forward

If your business is growing, compliance adherence is likely becoming more and more difficult to maintain and your risk exposure is growing in tandem. Consider an approach to compliance policy remediation that will scale with your growing business and with the changing regulatory environment through the introduction of an Operational Compliance group. Regain control of this quandary between business growth and regulatory change and position your business to adapt and succeed in this ever-changing environment.

Greg Neeser

Vice President-Operational Compliance

TransUnion, LLC

www.linkedin.com/in/greg-neeser-8693a0b

Building, maintaining and fine tuning compliance programs in the financial services industry has been the focus of Greg Neeser over the past 20+ years. Most recently, as Vice President of Operational Compliance for TransUnion, the construction of an operational compliance program for TransUnion’s US consumer reporting business has been Greg’s primary initiative. He will further adapt and extend this framework to TransUnion’s global consumer reporting business operations.

Opinions and information expressed in this article are Greg’s and are not to be construed as an official TransUnion statement.

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