Adjusting to a new normal
Financial services institutions had to adapt to a new normal and this obviously brought in changes in the way compliance functions are met:
The pandemic has complicated operational challenges of financial services institutions. Several components of risk and compliance like credit risk management, financial crime risk management and regulatory compliance have been impacted by the evolving situation and the risks encountered by these institutions have
reached new levels. These developments have forced regulators to evolve newer modalities, requiring the institutions to change the ways they handle compliance. What are the main changes that have come into force?
Vikas Gupta of Canara HSBC Oriental Bank of Commerce Life Insurance Co says as the world has changed gears and has now shifted to a virtual rather than a physical setup, traditional models are no more effective. “There is an enormous need to adopt new technologies, automate procedures and accept the new normal to keep up with the pace,” he says, pointing out that changes were required across People, Processes and Technology.
COMPLIANCE MONITORING TOOL
“Thankfully, we already had our digital Compliance Monitoring Tool in place with key changes / interventions that are required in the areas, which required physical i ntervention or on people who were impacted due to pandemic. Additionally, the regulator had already enabled online submission of reports / returns through Business Analytics Project (BAP) portal. Key changes were implemented in no time to automate data monitoring activities, virtual meetings with the regulator and stakeholders and cross training individuals to ensure business continuity,” says he.
Conjeevaram Bharadwaj of Future Generali Life Insurance says the company is familiarizing the instant calling through MS-Teams and advising the compliance team to use more of audio-visual conversation for resolving their queries with other functions, rather than email exchanges.
He explains that regular t eam meetings happen through MS-Teams to take stock of the situation, addressing challenges and coming out with solutions and this has tremendously helped in building employee confidence. Similarly, weekly knowledge sharing sessions are held with the team to upgrade skills, which was the expectation from legal & compliance team members to keep themselves updated. And with the help of HR, there were regular employee engagement programs - at least once a month - involving fun, quiz, etc, which ultimately proved to be the live wire which kept any unit going.
ACTIVE CHANGE MANAGEMENT
ICICI Lombard General Insurance Co took up the task of aligning its operating processes and procedures proactively with the changing dynamics. Loknath Kar claims introduction and adaptation of ‘remote working processes’ and ‘standard operating procedure’ were quick and successful owing to an inherent culture of ‘active change management’ in the organization. “The residual challenges were highlighted to the industry body and the regulator, either to secure compliance exceptions or to modify prescriptions to accommodate the prevailing states of affairs. Thankfully, other than a small redistribution of responsibility among the members of the compliance function and change in some peripheral processes such as document management, inframanagement, etc, we were not required to undertake any significant change in any work process to address the changed
dynamics,” he adds.
WFH WELL IN ADVANCE
Prakash Shetty of Clix Capital says the company was among few in India to have implemented compulsory work from home well in advance and were better equipped to meet the covid caused challenges. “When regulators were coming with lots of changes in governance norms, keeping the management informed about its implication and implementation, and training business and operation people to work as per new directions were things that we compliance people have managed well in remote non-face-toface era. We invested in technology to bridge the manual challenges smartly,” he says.
According to him, regulators were relying heavily on financial institutions to help the common public and other institutions. “For example,” says he, “implementation of moratorium, deferment of credit reporting, loan restructuring guidelines, helping SMEs via the government-backed ECLGS and other schemes, ensuring audit and compliance electronically, conducting board and stakeholders meeting through video conference were mega shifts, and we are happy that we have accepted the new environment and managed the situation in line with prospects.”
Devika Praveen says Fincare Small Finance Bank implemented steps like use of technology for accessing information in a secured manner, aligning the team to WFH culture, creating compliance checklist for remote/digital working, sharing regular updates on regulatory prescriptions, evaluating regulatory compliance periodically, advising on implementation of policy /processes and above all ensuring safety of the team.
What ESAF Small Finance Bank did, according to E.A. Jacob was to make the compliance department staff adopt WFH on a rotation basis, ensuring business continuity. Virtual meetings have been encouraged across the bank for regular interactions, he adds.