In conversation with compliance officers in banking and insurance businesses, I’m often struck by the disparity between what they aim to accomplish and the expectations they face—and the tools available to them. The position of the compliance officer, much like the chief controller, has in recent years evolved in parallel with the role of the chief financial officer (CFO), but most software tools have not kept pace.
In the past, finance teams were mostly responsible for efficient financial management and reporting. Today, companies look to CFOs and their associates for a more strategic contribution as organizations grow and transform. Business groups and clients alike perceive CFOs and finance team members as highly credible and well-informed business partners. They expect compliance officers and chief controllers, in particular, to act from a position of high integrity and with a clear view of the entire business.
Fragmented compliance efforts and limited transparency
For many compliance officers and chief controllers those perceptions and expectations may be aspirational, but they do not reflect their working conditions. For instance, an important part of the role of compliance officers is timely regulatory reporting on their company’s compliance programs. Many compliance officers find it challenging to meet reporting requirements because they lack access to reliable, consolidated business information. They must often navigate multiple, disparate data sources and request assistance from IT to do so. When compliance officers cannot easily delve into information and processes, reporting may not be accurate and prompt.
Compliance officers face more hurdles when they need to make sure that their organizations adjust to changing regulatory requirements. Such updates generally need to be auditable. Without the visibility and control this effort demands, the interactions of compliance officers with other stakeholders can be protracted and inefficient, which can delay or compromise compliance. The most successful compliance officers are masters at building relationships and working with their peers in the business groups—including IT—to achieve the visibility they need. Compliance officers who know their organization extremely well may be able to succeed this way, but somebody who is new to a company will find it more difficult.
Hampered chief controllers and desperate workarounds
Compliance officers are always highly conscious of compliance-related risks faced by banking and insurance organizations. Chief controllers, in their turn, are becoming more risk-aware as their companies face intense competition. All too often, growth—especially when it happens through acquisitions—means that chief controllers must deal with a jungle of software tools. It is not uncommon for chief controllers to access as many as 15 different financial reporting systems every day.
Under these circumstances, how do you ensure accurate finance management and reconcile financial and regulatory reporting within deadlines? You can invest the effort to become a proficient user of each tool. Or, you can collaborate with IT to get help. However, not all chief controllers succeed at either approach, which may result in longer close cycles and delayed or flawed reporting. Those outcomes, in turn, can lead to decisions that are late or mistakenly based on the wrong assumptions. They also could harm the reputation and standing of the compliance officer and other finance team members involved.
The risks of not fully empowering finance teams to succeed are substantial. At Oracle, we enable CFOs, compliance officers, and chief controllers to make the strategic contributions companies expect. We offer a wealth of industry and technical expertise and software tools that make it possible to integrate data sources and analytical applications, including the Oracle ERP Financial Cloud and Oracle Integrated Finance and Risk Platforms.
If you want to explore how Oracle aims to make the lives of CFOs and finance teams easier, download our eBook, Empowering Banking and Insurance CFOs in the Digital Era
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