Collaboration between compliance and strategy teams in the banking industry is proving to be a powerful driver of innovation and customer satisfaction. This strategic partnership not only enhances the overall client experience but also helps banks navigate the ever-evolving market landscape and prepare for unforeseen challenges.
Traditionally seen as opposing forces, compliance and strategy teams are now realizing the immense benefits that come with collaboration. With rapid advancements in technology bringing about new risks related to the economy and geopolitics, it has become clear that independent operations hinder banks from gaining a strategic advantage.
By joining forces, compliance and business leaders can significantly impact two crucial strategic objectives: differentiating the client experience and investing in fast-evolving areas. In today’s digital era, where customer experience is key to gaining a competitive edge, the collaboration between compliance and business leaders plays a vital role in crafting a client-centric approach. This partnership aims to streamline processes, eliminate friction points, and ultimately enhance the overall customer journey.
Take retail banking and payments as an example. Identity verification processes often pose challenges for consumers, being time-consuming and confusing. By fostering collaboration, strategy teams with expertise in customer needs can work closely with compliance teams to identify critical requirements and seamlessly embed compliance measures into customer journeys. This not only enhances user experience but also ensures adherence to regulations.
In institutional banking, overly complex know-your-customer (KYC) requirements can lead to frustration among clients due to the intense and sometimes redundant requests for information. Closer collaboration between compliance and strategy teams allows banks to simplify this process in a client-centric and risk-informed manner. The result is a significant improvement in customer satisfaction scores and a reduction in administrative touchpoints.
To kickstart collaboration, banks should initiate a review of priority client-facing processes. This serves as the starting point for cross-functional teams consisting of compliance, technology, operations, strategy, and other experts to identify opportunities for enhancing user experience through simplification or rationalization of controls. This inclusive approach ensures that compliance requirements are seamlessly integrated into customer journeys right from the beginning.
As financial institutions explore growth opportunities in rapidly evolving domains, compliance becomes a crucial partner in shaping strategies. Collaboration becomes pivotal in navigating compliance uncertainties related to data and analytics and capitalizing on emerging trends in environmental, social, and governance (ESG) offerings.
Banks considering investments or partnerships with data and analytics players now face new and sometimes uncertain compliance expectations. For instance, when employing AI algorithms for credit decision-making tools, compliance teams play a pivotal role in ensuring fair decisions and compliance with customer protection rules. Collaboration between compliance and strategy teams can inform the necessary investments in controls and AI talent to meet these requirements.
Additionally, compliance and strategy teams must work together to design transparent and compliant processes for creating and maintaining ESG investment products. Compliance teams, working alongside strategy teams, provide insights on aligning ESG factors with declared investment objectives, regulatory guidance, and processes for monitoring product performance.
To proactively address compliance considerations in areas earmarked for potential growth or investment, banks can designate compliance team members explicitly for strategically informed compliance insights. This collaboration helps identify potential regulatory challenges and implications for the institution’s planned investment actions.
Banks have a significant opportunity to revolutionize client experiences by fostering collaboration between compliance and business strategists. While quick wins are possible, sustained impact requires a thoughtful approach to building systems, processes, and foundational capabilities that enable scalable collaboration. By seamlessly integrating compliance considerations into strategic decision-making processes, through collaboration, banks can differentiate the client experience and make informed investments in fast-evolving areas.
In conclusion, the collaboration between compliance and strategy teams in the banking industry holds immense transformative potential. By aligning their efforts, banks can enhance customer satisfaction, effectively navigate evolving markets, and fortify their institutions against unforeseen challenges. This collaborative approach ultimately leads to improved client experiences and sustainable growth.
