COVID-19 – how should the Compliance Function respond?

We have seen communications recently from the JFSC regarding the industry’s response to the COVID-19 virus and it is encouraging that firms appear to have responded well to the challenges of home working. 

However, everyone will no doubt be aware of the additional risks that are presented by remote working and the vulnerabilities a business may be exposed to as staff work in a less structured environment.  It is also possible that prompt changes to operational processes have had to be made at short notice and there may be difficulties for managers in keeping in touch with colleagues or in exercising effective supervision. 

For the Compliance Function, there is also a risk that it becomes less visible to staff as firms focus on implementing urgent continuity measures and deal with pressing day to day matters at the expense of following policies and procedures.  Training and awareness on compliance matters also becomes an additional challenge. 

At times such as these, we believe that the role and profile of the Compliance Function is increasingly important and it should ensure that it is actively assisting the board and senior management in assessing and managing the risks that COVID-19 has presented.  It should proactively keep itself informed of operational pressure areas across the business and be providing input and advice on proposed changes to processes and controls where necessary. 

Furthermore, the foundation of an effective Compliance Function is its Compliance Monitoring Programme and there will be an expectation (by the JFSC and the board) that the CMP not only continues, but testing and monitoring activity is adapted and re-prioritised to ensure that it remains relevant and provides assurance that newly introduced, amended or existing processes and controls are operating satisfactorily.  

If you are looking for compliance assistance or support at this time, or simply want to have a chat, please get in touch (contact details on our website).