The Roadmap to Regulatory Compliance: A 5-Step Guide

The UK has one of the world's most well-developed and robust regulatory landscapes for financial services. However, it is also one of the most complex.

In part one of our regulatory compliance blog series, we explored some key changes organisations in the financial space need to be aware of in 2024.

A stream of new regulations, topping 800 in the past year, has left many organisations scrambling to stay ahead. And with regulators issuing fines exceeding $4.2 billion for compliance failures in 2022, the pressure to navigate this shifting landscape and maintain compliance is increasing.

In this blog, we provide a practical roadmap to help organisations operating in the financial sector negotiate this complex terrain. Our step-by-step guide breaks the process down into five manageable phases which help promote organisation-wide compliance. 

Step 1: Regulation Education

First and foremost, it's critical to fully understand the regulatory environment you operate in. Conduct a comprehensive audit to identify applicable regulations and their specific requirements (as well as any penalties for non-compliance), which may entail scrutinising local and international laws, industry standards, and guidelines relevant to your operations.

It’s worth investing in regulatory compliance software that can automate identifying and tracking changes, especially when we consider the sheer number of regulatory shifts we expect to see over the next year. 

Step 2: Building the Framework

The next step is establishing a robust compliance framework. At this point, it's advised to clearly define roles and responsibilities within the organisation, assigning compliance champions to relevant areas to ensure accountability and a coordinated effort. 

Invest in training programmes that promote awareness of regulatory requirements and keep teams up-to-date with the latest compliance developments. 

Step 3: Policies

This step involves translating regulatory requirements into actionable policies and procedures. These policy documents should be regularly reviewed and updated to reflect changes in both regulations and the organisation’s operations. 

Once again, this is a good time to lean on technology. Document control systems can automate the distribution, tracking and revision of policies, helping organisations operate within the bounds of compliance. 

Step 4: Monitor and Measure

As we are constantly reminded, compliance isn’t a one-time event but an ongoing process. That’s why it’s important to implement monitoring systems that track the organisation’s compliance performance, making it easier to assess and measure the effectiveness of policies and procedures. 

Data analytics tools go a long way in helping identify potential areas of risk and non-compliance. Additionally, such tools provide insights into patterns and trends, meaning organisations can proactively address issues before they escalate. 

Step 5: Continuous Improvement 

Compliance is a dynamic field, which means organisations must regularly revisit and update frameworks, policies and processes to ensure any regulatory changes coming down the line are accounted for.

Encouraging feedback from team members and stakeholders can open up a valuable line of communication and help foster a more collaborative approach to compliance. 

Help is at hand 

Organisations that weave compliance into the fabric of their operations are more likely to meet regulatory requirements, build trust with stakeholders and, ultimately, contribute to the overall health and resilience of the UK's financial services sector. 

For more information on 2024 regulations and how to prepare your organisation for change, download our free eBook "Navigating Regulatory Waters in 2024: A Practical Guide to Good Governance" today.