I’ll wrap up my series about the Accenture 2015 Compliance Risk Study by outlining how compliance should become a force for positive disruption in insurance carriers. According to the study, 77 percent of insurance respondents agree that the compliance function’s ability to predict and avoid reputation and financial crime can be a driver of competitive advantage.
Over the years we have seen compliance take a reactive role to business strategy, facilitating strategic decisions that were often taken without its input. As a consequence, gaps developed between the second-line support that organizations need and the capabilities that compliance could offer.
We think that many of these capability gaps contributed to the recent financial and reputational crises, and thus to the regulatory challenges that the financial services industry faces today. While compliance now enjoys a higher profile with the CEO and the board, it must deliver on its strategic mandate in order to maintain this status.
We believe that to thrive as a strategic partner in business transformation – and to protect the organization’s reputation – compliance should become a disruptive force in its own right. Our interpretation of the 2015 Compliance Risk Study suggests that compliance functions should take steps to become more aware of the changing ways in which consumers interact with their financial services providers in the digital space, and the new types of products, transactions, and ways of working that this transformation brings.
To do this, compliance needs forward-looking capabilities such as data management and analytics. We think that compliance skills should also include a more structured and forensic understanding of analytics and related technology. Compliance cannot solve for every emerging risk, so its practitioners should acquire the skills that help influence cultural and ethical change, thus encouraging self-correcting and self-policing behaviors.
This can require significant investment and add complexity, but compliance functions can leverage a number of existing collaboration models across the industry, such as industry utilities and shared services, to pool costs and insights. In these ways, compliance can begin to use its “seat at the table” for positive disruption.