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Risk Management v Compliance Monitoring

There is a common misconception between Risk Management and Compliance Monitoring in the Capital Markets sector. In reality, the two differ significantly but almost always co-exist in every FSA regulated financial institution. Risk Management is the management of trading activity in real-time while Compliance Monitoring is the monitoring and analysis of historical data to detect and manage breaches in FSA compliance and internal trading policies for auditing purposes.



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Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 12 January, 2012, 13:23Be the first to give this comment the thumbs up 0 likes

An old example used by the famous management guru Tom Peters comes to mind: You could build lifejackets from concrete. As long as you say this upfront and do exactly as you say, you can achieve 100% compliance ( under ISO9000 quality norms). On the other hand, you might not be around to realize the high risk inherent in your action! 

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