As every other week, this week we have again been reading about compliance cases popping up. The usual reaction is then a declining stock price, press releases from the company concerned stating that it is not so bad and that they are remediating the case and will cooperate with authorities. After that there is a public outcry and politicians demanding stricter rules and enforcement for the sector. Finally both the accused company and the peers have to do a lot of compliance work and start 'monitoring' similar cases/transactions leading to a huge increase of costs.

Although every top manager wants to quickly show action to the authorities, the emphasis then usually lies on doing things. Effectiveness and efficiency of the actions are not in scope. Unfortunately, the lawyers, forensic investigators, auditors and consultants involved have no interest in a quick solution as well: every stone needs to be turned now!

The end result is a bigger compliance department, more external consulting costs and less efficiency and time for the business to focus on the core business. Compliance is then hindering business instead of a business enabler. Sometimes things aren't that complicated as the experts might tell you. Some examples to highlight this:

Trade Sanctions monitoring

Would it need many resources to do this or could you make use of external software tools to automate this? Both might be wrong for medium and small sized companies. They are usually better of with a simple in-house developed solution tailored to their products, risks and countries. The information on sanctions is publicly available so an interface to these sources and connection to your business system might already cover 99% of your risk. Nowadays building digital tooling like this more simple then it used to be as software tools are already used a lot for internal data analytics. Going for a relatively simple solutions is not bad management but daring to choose for an investment that is in line with your risk profile as a company and that way being in compliance but still lean and cost efficient.

As every other week, this week we have again been reading about compliance cases popping up. The usual reaction is then a declining stock price, press releases from the company concerned stating that it is not so bad and that they are remediating the case and will cooperate with authorities. After that there is a public outcry and politicians demanding stricter rules and enforcement for the sector. Finally both the accused company and the peers have to do a lot of compliance work and start 'monitoring' similar cases/transactions leading to a huge increase of costs.

Although every top manager wants to quickly show action to the authorities, the emphasis then usually lies on doing things. Effectiveness and efficiency of the actions are not in scope. Unfortunately, the lawyers, forensic investigators, auditors and consultants involved have no interest in a quick solution as well: every stone needs to be turned now!

The end result is a bigger compliance department, more external consulting costs and less efficiency and time for the business to focus on the core business. Compliance is then hindering business instead of a business enabler. Sometimes things aren't that complicated as the experts might tell you. Some examples to highlight this:

Trade Sanctions monitoring

Would it need many resources to do this or could you make use of external software tools to automate this? Both might be wrong for medium and small sized companies. They are usually better of with a simple in-house developed solution tailored to their products, risks and countries. The information on sanctions is publicly available so an interface to these sources and connection to your business system might already cover 99% of your risk. Nowadays building digital tooling like this more simple then it used to be as software tools are already used a lot for internal data analytics. Going for a relatively simple solutions is not bad management but daring to choose for an investment that is in line with your risk profile as a company and that way being in compliance but still lean and cost efficient.