Balancing Governance & Efficiency in the Financial Sector

From anti-money laundering legislation to data privacy rules under the Fair and Accurate Credit Transaction Act, every financial organization must follow a complex set of laws lest they face serious fines and penalties as a result of non-compliance.

In light of that, many financial institutions face increasing scrutiny to improve their corporate governance and foster a culture of compliance and accountability. Governance officials and corporate secretaries know that a lack of compliance not only puts the entire business in legal jeopardy but can also result in serious reputational damage.

Still, even in an environment that requires airtight security and compliance, organizations must be able to maintain efficient operations. Not only do efficient enterprises avoid waste and reduce unnecessary costs, but they also get more done in less time, ensuring they are able to outgrow their competitors and continue to work toward innovation.

While efficiency is, of course, beneficial in the financial sector, it can also be challenging to achieve. With that said, the following sections will discuss a few of the ways financial institutions can increase efficiency and productivity without sacrificing good governance and compliance in the process.

Set Clear Expectations for Your Staff

Efficiency in your organization requires placing a certain level of trust in the competence, reliability, and integrity of the individuals you work with. However, the only way you will know that you can do so is when you can confirm that they have been trained and are thus aware of your expectations.

When your compliance officers and administrative staff fully understand what you need from them, they are more likely to meet those expectations. It is that clarity that opens the door to greater efficiency. If your staff doesn’t know their job well, they won’t be able to execute it well.

Your direct reports must coincide with the compliance deadlines you have coming up. Relevant documentation must be easy to find and gather, and meeting minutes need to be published within expected time frames. Check in with your staff and make sure they understand the gravity of these processes and their role in ensuring organizational compliance.

Establish an Effective Data Governance Policy

Data governance simply refers to the act of creating internal policies that apply to the gathering, storage, processing, access, and disposal of data. It is a critical pillar of compliance, as regulatory agencies require audit trails detailing how your business handles data from the time you collect it to the time you get rid of it.

To make data governance efficient, investing in automated tools is crucial. One easy way to get started is to introduce attribute-based access control solutions for your network. These tools will restrict access to sensitive data based on a person’s job title or seniority level, and using automated software means that the process will occur without the need for manual restriction processes. 

Attribute-based access control is just one of many ways in which you can automate your data governance to stay in compliance while maintaining efficiency. Your information security officer or IT lead will likely have more ideas to help you reach the same goal.

Create a Central Source of Truth for Your Data

One of the best ways to balance governance with the need for efficiency in your business is to introduce cloud-based collaboration tools. These can help you create a central source of truth for data, which allows for all of your company data to rest in the same place, thereby eliminating data silos and increasing transparency throughout every department.

Furthermore, a central source of truth for your data enhances governance by allowing all directors to rest assured knowing that the data they’re accessing is accurate and up-to-date. Your governance team can then use that data to drive better decisions for the organization as a whole. 

Since a central source of truth is free of redundancies and can be easily accessed via a self-service platform, it makes for an effective tool for increasing both business efficiency and productivity.

Put the Right Entity Management Tools in Place

In order to increase efficiency without sacrificing data governance, you’ll need to leverage entity management software solutions, which allow for automated workflows that can help your team optimize your compliance processes and reduce the risks associated with human error.

In addition to housing your central source of truth, an entity management platform will also facilitate regulatory compliance by allowing you to consolidate, track, and prioritize compliance tasks. If you are responsible for managing compliance for multiple subsidiaries, you’ll gain visibility into their compliance status as well, which grants you the ability to catch missed deadlines and errors before they can increase your risk exposure.

What’s more, you’ll also be able to streamline your governance operations and reporting methods. A good entity management platform will help you manage appointments, meetings, and audits so that you are always ready for what comes down the pipeline. You’ll also be able to easily produce reports and corporate documents for directors, shareholders, and regulators without having to figure out how to compile data from different sources. 

By leaving behind manual processes and leaning into digital transformation, you can help your organization take both its governance and efficiency to new heights.

Effective Governance and Efficient Processes Are Achievable

Perhaps the most important piece of advice about balancing governance and efficiency is to believe in the achievability of your goal. If you instead choose to believe that the way you have always done things is the only correct way to continue to do them, you may end up giving up altogether on striking the right balance for your business.

There is no doubt that stringent financial sector regulations and the need for accountability in governance are important issues for your business to address, but you need to keep in mind that efficiency and innovation are equally as important. 

The good news is that your business does not have to choose between any of these outcomes. By setting clear expectations, fostering effective collaboration, and putting the right tools in place, your organization can truly have it all.

Learn More with Athennian

With industries facing disruptions and global challenges, modern organizations need an additional layer of resilience to operate under an increased level of uncertainty and pursue their business objectives. 

Entity management software offers this extra layer of resilience by ensuring full visibility into organizational structure, instant access to all corporate records, automated compliance and efficient workflows. If you wish to learn more about how entity management can help prepare your business to operate at a time of uncertainty, please don't hesitate to contact the Athennian team for a free consultation and demo.

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