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Counting the cost of non-compliance

AIFMD, Basel III, Dodd-Frank, EMIR, Solvency II…There’s a raft of regulations for banks and asset managers to comply with. The cost of compliance is a concern to C-level execs across the board. But the thing that is really keeping heads of operations up at night is the consequence of not complying with the new rules. If processes aren’t adequate and compliant, these execs will be held accountable and risk being hit by hefty fines and even jail terms

So what are the requirements? The themes running through the regulations are transparency, auditability and control. Firms must make enterprise-level systems an investment priority to avoid falling foul of the regulators. Manual processes and spreadsheets may be quick to set up, but they are unreliable, open to manipulation, prone to glitches and offer no audit trail.

So why have banks been clinging on to their spreadsheets? Historically, trying to onboard reconciliations for complex, non-standard transactions into legacy systems has been a lengthy and difficult process. Traditional recs systems are simply unable to handle the complexities and many projects to shoe-horn complex transactions into these systems have ended in failure. Fortunately, those days are gone. With new technology and options for deploying reconciliations in days, rather than months, either on-site or through the cloud, financial institutions can now get up and running quickly without resorting to spreadsheets and other workarounds.

This speedy deployment is good news for heads of operations. With regulators cracking down on the unaudited processes lurking in siloes, they’re looking for individuals to hold accountable. To avoid this wrath heads of operations must safeguard their processes (and livelihoods) by investing in reconciliations technology that provides a complete, auditable view of the organisation and slashes the reliance on spreadsheets.


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