How a Global Pandemic Compliates Compliance

How a Global Pandemic Complicates Compliance

We’re experiencing the biggest shift in how we work in generations. The global pandemic has changed everything, including the nature of compliance. However, regulations—and the consequences for breaking them—remain the same.

Remote work, increased cyber threats, and a new awareness of risk and resiliency are changing how businesses and regulators think about compliance. Under these conditions, regulatory and compliance training is more important than ever. In this new and rapidly changing environment, organizations have a responsibility to provide employees with the information and training they need to remain compliant. By promoting consistency and accountability through training, your organization can avoid costly penalties and maintain your reputation in the industry.

Remote work may reduce oversight

A recent report from the Society of Corporate Compliance and Ethics found that 78% of insurance professionals are now working mostly or entirely remotely. Employees working from home means teams are scattered across wider geographical areas. Employees have less access to company resources and, in many cases, less direct supervision. Teams are increasingly dependent on communication technology to coordinate compliance across their organization.

Meanwhile, in the face of new extraordinary demands, some regulators are reducing or suspending oversight, providing extensions to supervisory reporting, and postponing regulatory initiatives or consultations. All at a time when employees are likely stressed, overwhelmed, and facing an uncertain future. In this environment, compliance errors may be harder to spot and track.

However, not even a global pandemic is an excuse for failing to meet regulatory standards. Financial professionals can maintain accuracy and accountability despite a challenging environment, by falling back on their regulatory and compliance training. Of course, this only works if they had the training in the first place. Untrained employees rely on instinct and common sense, which are not necessarily informed by deep knowledge of regulatory and compliance standards. Well-designed compliance training programs can close gaps in employee knowledge and reduce risk overall.

Cyber threats are increasing

The pandemic is forcing compliance and financial professionals to rely more heavily on technology. Communication and oversight that formerly happened face-to-face are now occurring online. This creates additional openings for cybersecurity threats to impact privacy, confidentiality, and daily operations.

Cybercriminals are aggressively targeting additional opportunities created by the pandemic. A report from INTERPOL found that cyber attacks are increasingly targeting major corporations, government entities, and critical infrastructure. Phishing and fraud is by far the biggest risk, but malware and ransomware also present immediate threats. In a recent survey, 71% of IT and cybersecurity professionals said security threats or attacks have increased since the start of the pandemic.

Employees are the front lines of your organization’s defence against cyberattacks whether they realize it or not. Whether working from the office or remotely, employees may receive more malicious emails than ever before. Those working from home may work on less secure networks. They may not even be aware of how less protected their home networks are.

Instead of the controlled, work environment with safeguards to protect confidential data, employees may be working alongside, or even sharing a computer with family members or others in their household. These outsiders to the organization may not understand security and confidentiality issues, or may not take them as seriously as your employees have been trained to do.

Financial professionals must understand the risks and challenges presented by remote work. They need clear procedures and frameworks to ensure confidentiality and avoid cybersecurity threats. Thoughtfully-designed training programs must be part of the solution.

Your reputation is at stake

An SCCE report found that 35% of compliance teams have seen an increase in the number of inquiries as the pandemic has disrupted economic activity around the world. Business interruptions and financial uncertainty are now commonplace. These factors may create an increased burden on your organization and your employees, or create new challenges for your clients.

While reporting guidelines may be extended and oversight may be evolving, regulatory agencies still demand compliance with rules and guidelines. A misstep now could create long-lasting repercussions for your organization.

Most importantly, when the crisis of COVID-19 has passed, the actions of your organization during this emergency will frame its reputation for years to come. Lawmakers and members of the public will look to your conduct during this time as an indicator of your trustworthiness and reliability. How your organization acts in extremis, will help them to decide whether to trust you with everyday compliance.

Compliance training mitigates the risks

This is a new situation for employees and leaders alike. As individuals, we will each respond differently to this new threat. Some will become hypervigilant, while others will be overwhelmed by emotion and responsibilities. However, your organization, and indeed the entire financial insurance industry, must deliver consistent and reliable regulatory compliance under these new circumstances. This is impossible unless you offer your employees appropriate guidance.

Regulators and financial insurance professionals should not rely on common sense alone to ensure compliance. Common sense is unpredictable and inconsistent across the population. Instead, leaders must set an example by visibly complying with the rules, regulations, and guidelines of the industry. Compliance training that specifically addresses our new way of working is an exceptional way of promoting compliance.

Prepare for future compliance changes

Some changes brought by the pandemic may become permanent. In a survey by Compliance Week, 76% of Chief Compliance officers said they thought this situation would permanently impact the way their job is performed. Business leaders are likely to alter the way they understand and measure risk. Moving forward, business continuity and resilience are likely to be key areas of focus.

Insights and stressors from this global catastrophe will prompt the development of new regulatory guidelines as well. Yet, the pressures of pandemic response are also leading to budgetary restrictions that may challenge the compliance efforts of some organizations. Your organization must be prepared to provide ongoing regulatory and compliance training that reflects this evolution.

The right training partner can help. Oliver is trusted by regulators and professional associations to protect the integrity of their education, certification, and compliance programs. We can help you equip your employees with flexible and affordable corporate compliance training during the COVID-19 pandemic and beyond. For more information, contact an Oliver compliance training expert.

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