Enterprise Compliance Risk Management

Part TwoThe What, Why, and Who of Compliance

Practitioner's Note: The symbiotic relationship between the regulator and the regulated

I have seen the changing contours and complexities of the financial landscape from close quarters over the last four decades. The evolution and metamorphosis in the financial services industry have been fascinating. We witnessed rapid changes that have introduced new complexities both in regulation and financial business. It is in that context one needs to review business growth, the relevance of compliance, and its management.

The fundamental objective of the two classes of regulations, regulatory (prudential) and financial conduct, though focused on different specifics, are similar in that they both attempt to establish financial discipline, and at the same time, help the financial well-being of institutions and the economy. As a regulator who introduced and implemented various types of regulations and as the chairperson of a well-recognized bank, I have experienced compliance from both sides—the regulator and the regulated. Although the perspectives, issues, and concerns are very different from each other, the common goal is to establish a safe and sound financial system that drives the healthy economic development of the stakeholders. Interestingly, however, neither can achieve their objectives optimally except through effective coordination between them.

The coordination and collaboration are more visible today than in the past. What is ...