Compounding this complexity is the fact that many firms consist of multiple legal entities and the SM&CR applies at legal entity level. Therefore, requiring multiple Responsibility Maps and Statement of Responsibilities for Senior Managers with roles in several firms within the Group. This imposes more emphasis on consistency, change management, version control and interactions between entities.
Redland’s clients have selected a technology solution to help them manage Risk and Compliance, and specifically SM&CR, in a better, faster, cheaper and far safer way than is possible with manual solutions. Our solution offers an opportunity for firms to apply more stringent controls that mitigate the risk of human oversight or inefficiency by automating compliance and implementing a system that places transparency at the heart of business operations, minimising the risks of malpractice across front, middle and back-offices.
The cost and pace of regulatory change is cited by many Chief Risk Officers and Chief Compliance Officers as one of the biggest and highest priority risks in the industry and there are no signs of it reducing. The degree of regulatory change, if anything is set to increase.
Within a typical, medium sized firm, it is easy to identify 100+ existing or new policies and processes impacted by SM&CR. In addition, over 40 new ‘Regulatory Artefacts’ must be maintained, kept in sync and retained as evidence (e.g. Responsibility Maps, SoRs, Reasonable Steps Policy, Handover Policy, etc).
A particular bank updated their Management Responsibilities Maps (which have to be submitted to the Regulator) 12 times in the first 24 months, including more than 200 updates to their Statements of Responsibilities (across approx. 20 Senior Managers).
In another case, a bank performed manual updates to 6 SoRs which required approx. 80 man hours of effort. Using our solution the same task would take 90 minutes, with a guaranteed and consistent result. Furthermore, the Certification element of the regime imposes critical dependence on existing Performance Management (HR and Training & Competency). These functions are typically inadequately equipped or resourced to provide the significantly increased rigour that the regime demands.
One of our clients originally implemented SM&CR based on a combination of existing HR systems, spreadsheets and manual processes. Whilst it was sufficient to meet the regime’s requirements, it resulted in the following issues:
To address these issues, our client chose Redland’s SM&CR solution. The contrasting outcomes were as follows:
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