Financial compliance doesn’t get any easier for businesses. To call the regulatory landscape ‘fluid’ would be an understatement.
From relatively new and evolving priorities like data privacy and sustainability to ever-shifting cyber security threats to the sanctions regimes affecting who you can do business with and where, organisations have to be constantly on their guard.
Just the sanctions regime alone is creating an increasing administrative burden for UK companies working with international partners and clients. Since Russia’s invasion of Ukraine, financial sanctions against individuals and organisations have multiplied rapidly. There were 1000-plus updates in 2023 alone, and the announcement of a new Office for Trade Sanctions Implementation (OTSI) to focus on enforcement.
Breaching UK trade sanctions is a criminal offence. In January, the Solicitors Regulation Authority wrote to 1000 legal firms over concerns that many had ‘poor’ controls and risk management processes in place.
But while regulatory demands increase, the current economic climate means many firms are loath to raise their compliance budgets in lockstep. A survey by Thomson Reuter Regulatory Intelligence in the US found that three quarters of compliance teams expected an increase in regulatory activity in 2024, but around two thirds did not expect their teams to grow. Just under half believed their budgets would either be frozen or shrink.
With the financial and reputational risks of compliance breaches too significant to ignore, businesses are faced with the unenviable task of making their current compliance budgets stretch even further. Here are some ideas for how that can be achieved.
Investing in compliance tech
Investing in new tech might sound counterintuitive given that a lot of organisations are struggling to find extra cash for their compliance budgets. But doing more with less is often a case of diverting spending to where it can have the biggest impact. Compliance tech is a strong contender.
A mainstay of legal tech solutions for many years, compliance tech apps are now being separated out as standalone solutions. Available as SaaS products that are easy to integrate with your existing tech stack, the latest generation of compliance tech is also harnessing the power of AI, making for powerful, flexible yet affordable solutions.
Embedding compliance across all personnel development
Out of necessity, a chunk of compliance budgets inevitably has to be spent on keeping the skills and knowledge of compliance teams up to speed with all the latest changes. But training and development spending can have a bigger impact if it’s targeted at extending compliance awareness across your entire organization, not just the compliance team.
The benefits of this approach have become clear from data protection and cybersecurity. Major frontline risks require a frontline response. It’s not just up to one department or team to keep your business protected. You need everyone to be aware and vigilant.
Outsource your financial control operations
Finally, specifically in the realm of financial and tax compliance, one way you can make your resources go further is by outsourcing financial control to a specialist provider. Financial control outsourcing is like the ‘full fat’ version of hiring an accountant, putting all aspects of financial administration in the hands of specialists. It frees up internal resources, it brings about cost savings through efficiency gains, and in critical areas like compliance and risk management, it raises the bar on accuracy and reliability.
To find out more about financial control outsourcing, contact our team today.
