Shifting to Principle-based Compliance




Financial services institutions are no strangers to complexity and the ever growing regulatory burden means that banks need to adapt their ways of working to ensure compliance to the regulations. But it's not just a matter of having a simple checklist of activities that ensure you're in compliance. Some regulators, like the UK's FSA, have moved to a more "principle-based" compliance regime, which means it's no longer enough to just comply with the letter of the law, you have to comply with "spirit" of the regulation.

So just what impact does that have on the internal processes of financial institutions?

Pete Henderson, SVP Strategy & Change Management Executive at Bank of America says that an end to end view of processes is absolutely essential because what may look appropriate in isolation, when viewed across departments might not be. A letter to a customer in isolation, for instance, may appear fine but when you view it in the context of the overall experience a customer has had with your organization, you can start to understand how that letter can appear contradictory or even wrong. In this video interview, Henderson describes how moving to a principle-based regime required a shift in thinking about their processes and the importance of mapping processes from a customer's point of view.

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