Financial Compliance: Which regulations must be considered?

Why is compliance so important? It minimizes risks and creates trust among industries, governments, and people. This sounds like a no brainer, but the challenge is figuring out which compliance standards fit your business. One mistake could cause huge debts and lawsuits. This issue is particularly serious for the financial sector, which has legal and operational standards that are the bedrock of compliance management. Since banking is a pioneer in compliance management, we are going to take a deeper look at the regulations they must follow. 

Financial Compliance and law framework

Over the years, the world has become more connected and tons of data is processed, shared, and stored through the digital ecosystem. The internet has become a necessary resource, but a good threat opportunity for theft and hackers. In an attempt to minimize risk, public and private institutions have created norms and regulations to ensure data safety. So, which are the main compliance regulations that businesses located in the financial field must consider? We have highlighted the most important laws that impact the financial market. 

  • The Dodd-Frank Act [2]: Was passed by the US Congress and signed into law by President Obama in 2010. It aims to enhance the way the financial market is deploying accountability, transparency, and consumer protection procedures. This act enforces the need of storing records for every transaction. The thing organizations sometimes miss is that any activity related to trade must be stored as well. This includes electronic communication such as emails, chats, voice messages, and so on. 
  • Bank Secrecy Act (BSA AML) [2]: Also known as the Anti-Money Laundering Act, this act was created in 1970 and requires every company to cooperate with the US government in the aim of detecting money laundering. Thanks to the BSA-AML act, we all need to provide data under request. Since this regulation has been in the market for more than 50 years, you might be familiar with it. If not, you should know it emphasizes the importance of keeping your data storage. What else do you need to do? This act requires companies to delegate compliance responsibilities to an individual and also create a training program for appropriate personnel regarding compliance standards. 
  • Sarbanes-Oxley Act. Signed into law in 2002 to strengthen financial regulations. In the beginning, businesses didn’t take it well, but eventually, it contributed to counteract the effect of the economic crisis in 2008. This act raised the standards given for audit reports, but this is something we all can expect with a new act. What is new? SOX also gave legal protection to whistleblowers to testify in court about any illegal practices they are aware of without any retaliation. Be sure to train your employees to identify any practice that infringes on compliance in your business. You have a good opportunity to make them allies.

Consumers in the centre of compliance

As consumers are becoming more important, they are also protected by compliance regulations that companies need to follow. Data privacy and accessibility are just one of the areas you need to nurture. 

  • Gramm-Leach-Bliley Act (GLBA): Requires financial institutions to explain to customers their information-sharing practices and to safeguard consumer information. To ensure the correct execution of this, companies must establish a security program that protects consumers’ nonpublic personal information (NPI). NPI includes name, address, income, Social Security number, account numbers, payment history, loan or deposit balances, credit or debit card purchases, court records, and consumer reports.
  • Fair and Accurate Credit Transactions Act: FACTA, signed into law in 2003, enforces consumer power by enhancing procedures to ensure the accuracy of their credit records. With FACTA, consumers have the right to ask for a credit report each year. This act also provides resources to prevent crimes such as identity theft. 

Data is important for compliance purposes. As we recommended to one of our financial customers: If you are using Salesforce, integrate your system and take advantage of all the resources you have (Salesforce Sales Cloud, Service Cloud, Analytics, Einstein AI, and more). You will build close relationships with your customers while meeting your compliance standards. Also, don’t forget your employees.  


Financial Compliance


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