As regulatory requirements have increased over recent years, the pressure between compliance and sales is causing problems for many firms. Compliance can be seen by business development teams as something that blocks growth and revenue generation, and at times this can cause sales teams to try to find work arounds or put increased pressure on compliance teams to weaken their controls.
The relationship between compliance and sales is critical for the success of any financial services business. Compliance teams that are seen as a key component in business growth are the most influential and respected, but this is not an easy position for a team whose main function is meant to be managing risk.
How can compliance teams ensure that firms are meeting legal requirements and are protected without being seen as holding the firm and sales teams back? Surely the role of compliance is to prevent the business from taking unnecessary risks and therefore it follows that compliance will always need to be a ‘business blocker’ to some extent?
But compliance can increase revenue as well as reduce risk
By working with other teams to help increase revenue, compliance teams become more valued and respected in a business. Colleagues don’t try to avoid asking for their input but actively seek their advice. Sales stop trying to work around their procedures and rules, and instead actively involve them in finding solutions for perceived ‘difficult’ cases.
The relationship between compliance and sales
Having an effective relationship between compliance and sales is vital. Compliance will always have to say no to certain requests but, by balancing this with activities that help sales, compliance professionals can make sure that they are not seen as blockers.
Compliance teams that work with sales to see how changes to the way they operate can help increase sales and reduce barriers, without increasing risk unreasonably, tend to be more successful in delivering a solid compliance function because they have the cooperation of their colleagues.
Effective compliance teams also help sales to understand the risk profile of the company, i.e. the balance and company priorities in compliance, rather than just policies. This way compliance helps sales deliver their targets but have more influence over the manner in which business growth occurs. If sales and compliance can have effective conversations, they can improve the fit of compliance frameworks and respond quickly to changes in the market and risk profile.
Invest in training and knowledge sharing
One of the most effective ways to cut the cost of AML compliance is to train staff on what they need to do. Yes, staff training is expensive for a number of reasons but it can be worth the extra cost in the end. When your staff understand what is expected of them, they can stay ahead of the regulations and avoid any major issues. Additionally, a well-trained workforce can easily train new staff to keep everyone on the right track.
In terms of your sales teams, training to ensure they understand the basics, the reasons and the importance – implications for the business and their job.
Knowledge sharing goes both ways
But knowledge-sharing goes both ways. Involve your sales team in the difficult cases and listen to their gripes. Include their feedback in your process reviews and adaptations and ensure they understand the regulatory lines and barriers. Involve them in some of the decision-making process and show that you have listened to their feedback, even if you can’t provide them with everything they want.
Better data management
If you aren’t managing your data effectively, you could find that the cost of AML compliance soars and that you are causing unnecessary issues for your sales team. With better data management, you can ensure that everything is as it should be and often, new technology is a good way to achieve this. Data management is all about keeping track of things and having processes in place for any red flags.
Look into data management tools to help save time and money and help your sales team, while also remaining compliant with the AML regulations.
Stay up-to-date
You could find that you are spending more on AML compliance and impacting sales because you are not on top of the changing regulations. These regulations can change and become stricter relatively frequently and if you wait to comply with the regulations all at once – the cost could be greater. By spreading out the workload and staying on top of any changes, you can cut the costs of AML compliance easier than you think.
Use the right technology
It should be noted that using specialist technology can massively impact the overall cost and impact of AML compliance. Technology tends to make things easier and cut down on resources required – so it doesn’t hurt to consider your options. Recent reports show that firms that utilise more advanced technology and data systems, incur lower compliance costs. These firms also expect compliance cost growth to be slower than for other firms, which suggests that data and technology plays a crucial and effective role in helping firms reduce the cost and burden of AML compliance.
Passing on compliance costs
If you operate in a business where your clients need to be compliant, they are the ones who benefit most from your compliance procedures and so you can easily justify the need for them to absorb some of the costs.
In order to do this compliance teams need to educate sales on the benefits to clients of absorbing these costs. For example, clients who employ advisors and third parties to develop their initial frameworks and procedures, maintain understanding and control over this vital component of their business.
Compliance teams that achieve this effectively reduce their own workload but are still able to ensure that they have effective compliance structures and strategies in place. This enables them to reduce costs but also focus more time on strategy and maintaining effective relationships within the business.
Justifying compliance budgets
If compliance is seen as nothing more than a cost centre, then this will impact on the resource available and its influence compared to other revenue generating activities. But compliance can justify its budget through revenue generation as well as reducing charge backs and fraud.
This doesn’t mean taking on too much risk – look at possible changes that won’t increase risk or that will give a more effective fit to the risk profile required by your business. Highlight to the business how the changes you are making will impact on profitability, for example through:
- Speeding up realisation of revenue
- Reducing the cost of acquisition
- Reducing dropouts
Maintaining the correct balance of reducing risk against increasing sales, and making sure client-facing compliance procedures are as efficient as possible, can help ensure that compliance is seen as a vital part of revenue generation rather than just a cost centre.
This tends to increase the status and influence of compliance within the business, moving compliance from a cost centre to an important component of sales and profit generation.
Effective compliance
Compliance isn’t just about protecting a firm, it is vital for success and profitability. Effective compliance departments should see themselves as setting the framework for secure growth. Through effective collaboration and efficient procedures, compliance teams can be seen as helping to increase sales and a crucial component to business growth and evolution.
How Neopay can help
Neopay offers a comprehensive solution to bridge the gap between compliance and sales, fostering a collaborative environment that promotes growth while adhering to regulatory standards. By focusing on effective training and knowledge sharing, Neopay ensures that both compliance and sales teams are well-informed and aligned, enhancing overall efficiency and profitability. Our approach helps compliance teams be seen as valuable partners in business development rather than obstacles, promoting a culture where compliance actively contributes to revenue generation.
To learn more about how compliance can drive business growth and increase your revenue, contact our team here.
