The compliance team’s duties are still a brainteaser for many industry players in Latin America, especially when interacting with customers. Companies juggle to have best practices and procedures to identify risks but establishing the precise mechanisms to deliver compliance and customer satisfaction at the same time is full of myths.
The absolute truth about compliance is that everything can suffer unannounced modifications, and the pace of movement of this field is not going to slow down anytime soon.
In this new normal, the most valuable commercial feature is trustworthiness, and failure in third-party risk management leads to poor customer experiences, jeopardizing their perception of you. Let’s take a glance at real compliance teams’ opinions about this1:
Overwhelming, right? Uncovering some of the most common compliance myths can reduce the negative impact on your customer success rates. In joint with the International Compliance Association, we have broken the most common myths:
“Growing regulatory demands inevitably strain our team and our skills”
Reality: It is regular for compliance teams to feel exceeded by the clients’ onboarding processes due to the regulatory changes. However, automation can help create rules-based workflows that target manual reviews where they are most needed. Working smartly by leveraging automation throughout the process can make third-party screening significantly less of a strain on resources.
“Unfortunately, our customers will always share the burden of compliance checks”
Reality: During the onboarding process, businesses require crucial data about new customers. This can result in delays, bureaucracy, and piles of paperwork, stressing teams and clients. Accessing accurate, constantly updated third-party global data - such as watchlists, PEPs records, and Adverse Media- eases this process. You might only need to ask for non-public information.
“In reality, once our customers are onboarded, we can only check them again every few years”
Reality: With a rules-based system, you can set guidelines for ongoing monitoring. As opposed to in-depth reviews, this will reduce the time taken for each check, while data triggers can alert the team and alter the risk profile of businesses when circumstances change (financial performance variations, mergers, and acquisitions, human rights breaches, or management adjustments).
“All suppliers need to follow the same onboarding process, whatever they do”
Reality: Onboarding processes can be streamlined depending on the industry and the level of assumed risk, making the process much more tailored to the user. Automation creates a dynamic process by assessing the areas of risk relevant to each supplier and the appropriate level of scrutiny. This saves money and time for everyone involved.
“A global compliance program is hard to manage consistently”
Reality: In compliance localized mistakes can have significant consequences, but by leveraging a configurable and automated solution, organizations can pursue the same compliance policy worldwide and deploy it according to risks and compliance challenges in each region. Also, forms available in local languages will facilitate easier onboarding for customers and suppliers.
“We’ll always be limited to some extent by the information that we’re given by our customers and suppliers”
Reality: Relying on self-disclosure data can fail to uncover areas of concern, so it’s important to verify the details provided by customers through reliable, constantly updated third-data global sources. Advanced platforms can even make use of unstructured forms of data to identify and highlight concerns, such as scanning social media for any references to negligence.
“Automation will mean we’re at greater risk of missing something”
Reality: Ensuring that human attention is focused on the more complex, riskier cases, automation means organizations are at a lower risk of missing something crucial. Automation does not mean moving to a hands-off approach. It means that administrative tasks, such as manually monitoring review schedules, can be eliminated. Use your time wisely!
“Data protection rules will limit the data we can access in compliance checks”
Reality: With the rise of legislation like GDPR, organizations are becoming much warier about the data held on third parties – including as part of compliance checks. However, organizations have a legitimate business use for collecting data on suppliers and new customers, meaning that compliance teams are acting legitimately under data protection regulations by carrying on this process through automated platforms.
“Compliance will always be seen as a road bump – if not a cost-center – for the business”
Reality: More businesses are recognizing the importance of compliance practices for avoiding penalties and protecting the company reputation. The cost of failing at this matter can be high, so compliances functions as a type of insurance; you know you need it but hope you don’t need to fall back on it. With automation, compliance is faster, more comprehensive and deliver wider business benefits.
“Where we operate means my business is not at risk of modern slavery”
Reality: Compliance programs must ensure that new customers and suppliers are legitimate, stable, and honest regardless of their location - even the developed countries are exposed to modern slavery, trafficking, and corruption. Third-party data helps uncover those patterns within supply chains and potential prospects. Beware of ethical risks!
Solved mystery? Supporting your client’s journey is the key factor in compliance management.
Compliance professionals have more responsibilities than ever before, and the need for optimal third-party risk management to provide an excellent customer experience while shielding your company is unquestionable. However, third-party risk management does not have to be painful.
Actionable insights, reliable data, and user-friendly automation platforms such as the ones provided by CIAL Dun & Bradstreet, based in our Data Cloud and aligned with our Live Process Identity, can help you grow your business’ value and give you the peace of mind you need.