Proactive Compliance refers to the best practice of applying an anticipatory and self-motivated approach towards industry regulations and compliance standards. An organization that practices Proactive Compliance will take steps to implement best practices and identify and address any potential problems before being required to by regulations.
Proactive Compliance allows organizations to mitigate risk and protect their business and their customers. Further benefits of Proactive Compliance include:
- Protection from fraud and risk by monitoring interactions across all communication channels to see emerging trends, detect potential fraudulent activity, and flag and quickly address breaches
- The management and reduction of financial and legal risks
- Decreased potential penalties by automating risk analysis, management, and mitigation
- Improved management visibility into operations
- Avoidance of higher incremental costs that result from periods of non-compliance and reactive practices
- Saved time that would otherwise be spent taking corrective measures
Unique to Financial Service organizations, one of the most prevalent regulations in recent years is the Dodd-Frank Act. Dodd Frank requires that all financial trade-related communication be recorded, including calls, emails, texts, instant messages, and more. Regulations continue to evolve, which is where Proactive Compliance becomes extremely important.