Tom Fox welcomes Brett Manwaring to this week’s Innovation In Compliance podcast. Brett is a Managing Director, Financial Crimes Risk Management at K2 Integrity. Prior to joining K2 Integrity 8 years ago, he served at KPMG and JP Morgan Chase. Brett and Tom talk about the importance of documentation, from both a regulatory and business perspective.

Innovation Can Happen Organically

It’s a common perception that banks are resistant to innovation, Tom comments. In response, Brett remarks that banks, like most people, are resistant to change and innovation is closely tied to change. However, if banks realized what they have and what they can control, innovation could happen organically. A key component is understanding your data, he points out. K2 Integrity can help businesses organize their data into a central repository, which any department can access and leverage.

Poised for Innovation but Unaware

“When it comes to innovation,” Tom asks, “do you see smaller or perhaps midsized companies more poised to engage in innovation?” Brett replies that smaller companies are indeed more poised, but they often don’t know it. The reason they can innovate quicker is that they have less customers, transactions, and data to control. Less data equals more opportunity to innovate quickly. He shares tips on how companies can innovate but still remain compliant with financial regulations. One strategy is to do a data lineage exercise, which Brett says can set up companies for a positive yearly review with regulators. “[Great] reporting creates great discussion, and that great discussion creates great decision points, and those decision points – if they’re implemented correctly – are the basis for your yearly review with regulators.” 

The Case for Documentation

To every line of business, including new products and services, there should be a compliance officer attached. “Every decision has a downstream impact,” Brett reminds listeners. “The decision you make is going to impact somebody else.” As such, the compliance officer helps the company to anticipate and mitigate the associated risks. “That will eventually lead to a good review at the end of the year from your regulator because everything’s ticked and tied and you thought downstream,” he adds. We face additional changes and risks due to the pandemic, so companies should make sure that their reporting reflects those changes. “The three most important things in any compliance program are the following: document, document, document,” Tom quips. “You laid out the business case of why documentation could be such a powerful business tool and a part of your overall business plan going forward,” he commends Brett.


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