Risks and Opportunities of Compliance

01 July, 2021

Whether it’s an increase in health and safety obligations, or reporting and disclosure requirements of the new AML legislation, there is no doubt compliance obligations have increased and will continue to do so.

Increased compliance is consuming more management time, company resources and impacting the bottom line, however it can also present an opportunity to businesses.

The risks and costs with getting compliance wrong

In finance and banking in particular there has been a surge in compliance requirements and compliance related staff. A recent NBR article noted that some 30,000 (15%) of the 204,000 employees of Citigroup, worked in compliance and other control functions (an increase of 4% from 2008) & HSBC spends close to $500M per annum on AML compliance alone.

Most major roading, trucking & construction companies in New Zealand spend nearly 50% of their board meeting discussing health and safety, recent incidents and how processes need to be improved. Company Directors are now personally liable if health and safety incidents are the result of negligence.

The RBNZ recently revoked ANZ’s NZ accreditation to model its own capital requirements due to ‘persistent failure’ in its controls and attestation. They have told ANZ it needs to increase its minimum capital for operational risk by 60%. This has large financial implications and presents reputational problems for the bank.

Getting compliance right is becoming core to businesses worldwide, but how can a risk be turned into an opportunity?

The opportunities in added compliance

An important part to recognize about compliance obligations is that they are industry wide – meaning if you must do it, so does your competitor.

This also tends to mean whoever does it better, will win and grow market share, avoid potentially large fines, and reputational damage that competitors may incur from doing it poorly.

Herein lies the opportunity

Companies with streamlined health and safety measures and good health and safety records are being awarded larger government contracts, because they are demonstrating a good history of H&S standards and are able to price more competitively due to a streamlined cost-effective system in place.

Companies that avoid the reputational damage, fines or drawn-out arbitration processes can capitalise on their competitors’ shortcomings and grow their own market share by doing the right thing and ensuring consumer confidence remains high in their business.

First AML is seeing this play out with customer onboarding. By using First AML’s complete AML solution our customers have seen vast improvements in their customer onboarding process, and are being able to onboard customers more quickly and with less friction than their competitors. This translates into winning more business and starting customer relationships on the right foot.

The long and short of it

At the end of the day compliance in businesses is here to stay, and trends suggest compliance will continue to increase over time. As business owners we can see this as a negative, or we can try and see the opportunities it presents. If done correctly and streamlined, there is significant upside for the winners in this new world of ‘Competitive Compliance.’

About First AML

First AML simplifies the entire anti-money laundering onboarding and compliance process. Its SaaS platform, Source, stands out as a leading solution for organisations with complex or international onboarding needs. It provides streamlined collaboration and ensures uniformity in all AML practices.

First AML transforms an otherwise complex and manual process into one that is simple, cost-effective, and compliant for businesses. By delivering efficiency and time savings, it protects reputations and enables companies to stay on the right side of history in the face of global threats.

Keen to find out more? Book a demo today! No time for a long demo? No problem. See what Source by First AML can do for your business in 2 minutes – watch the short demo here.