Compliance challenges and associated fines impact many financial services institutions every year, even the most mature ones. That’s why I was surprised when I recently saw a report citing that global financial institution penalties actually declined in 2021, with the total number of fines levied against financial institutions globally for compliance breaches at around 175 compared to 760 in the same period in the previous year.
While less fines overall may be great news for the financial services community, it’s also likely that the pandemic caused some regulatory investigations to be hindered by limited on-premises visits in the last two years, which could have artificially deflated 2021 fines. That said, I tend to believe compliance challenges are still very prevalent. Based on anecdotal evidence and interactions with some of the largest financial institutions, it seems many are still far from satisfied with the institutional governance, risk and compliance solutions, and related programs throughout the industry today.
With even a single incident potentially costing an organization millions, having the right evolved compliance approach—including simple fixes that a number of organizations overlook—can significantly mitigate the risk of fines.
Without a doubt, compliance efforts at most financial services organizations are vigilant and ongoing, but even then, they can often fall short in critical regulations and standards, like with the Payment Card Industry Data Security Standard (PCI DSS) validation processes. So, what can institutions do to improve their effectiveness? The following three proven approaches are key discussion points to include in regular compliance team planning sessions:
Following the three approaches above can maximize your compliance efforts and have serious impacts on your institution’s bottom line, including mitigating your risk of costly fines and failed compliance audits, which can lead to six months of remediation work, added expense, and another audit. Trusted vendors like F5 who have a proven track record in streamlining the audit process for financial services institutions can help.
To learn more, explore F5’s Banking and Financial Services compliance solutions or contact your F5 representative.
(Authored by: Rick Jorolemon, Solutions Engineer, Financial Services, F5)