Regulatory non-compliance is bad news for any business or brand.
Paying a big fine is one thing, but the cost of reputational damage – plus the impact on customers and employees – is even more serious.
He said: ‘We’ve all seen the news headlines when a business is hit by a big fine for breaching AML, cybersecurity or other regulations.
‘Every report and headline – and the damage it creates in terms of the public image of the business or brand concerned – is a stark reminder of why it’s essential to make sure employees have the best possible training about these complex issues.
‘Of course, it’s always been important to equip employees with the skills and knowledge they need, but with the direction of travel in most sectors being towards tougher regulations and bigger fines, specialist professional training is now more important than ever.’
In the UK, news channels regularly feature businesses that are counting the cost of breaching regulations.
The fine would have been over £40m had the bank not been given a discount by the regulator for agreeing to resolve matters that were highlighted during the investigations.
In a world saturated with news and social media coverage, firms also have to be aware of the risks posed by complaints from customers which then prompt investigations by journalists.
‘Putting aside views about this specific case, it is a good example to show it’s not only regulators who have the power to put businesses under scrutiny about compliance issues,’ Rob said.
He continued: ‘Whether it’s investigations by regulators or journalists, every case will have its own unique set of circumstances.
‘Having said that, professionals who provide risk mitigation and compliance training can see three broad trends in the UK and other regulated jurisdictions.
‘All of these trends are important to note when managers and employers are reviewing training provision.
‘Firstly, regulators are taking a tougher stance against firms to ensure that businesses are held to account for breaches.
‘Secondly, news and social media coverage about big fines being imposed is being used to send out a warning to other businesses of the risks they face for breaching regulations. The days when a business could be fined and it would pass under the media’s radar are long gone.
‘Thirdly, the challenges of compliance are increasing, not only because of the complexity of legislation, regulations and guidance, but also due to the sophistication of AI technology which is making it increasingly difficult to identify cyber criminals who pose as bona fide, law-abiding customers.
‘This is particularly important in the financial sector where KYC (know your customer) compliance is vital.
‘These trends all highlight the importance, and value, of investing in expert, professional training to reduce the risk of hitting the headlines for all the wrong reasons.
‘It’s also worth noting that even if a business is fined, some degree of mitigation can sometimes be gained if the firm can demonstrate to the regulator that everything reasonably possible was done to ensure compliance.’
Summing up, Rob said: ‘Reputations are hard to build and easy to destroy – especially in a world where online communications can spread bad news faster than ever before.
‘However, the headlines and news reports only tell part of the story. Such cases will involve a great deal of anxiety and stress for everyone within the business involved in the investigations, and those who have to work hard to put matters right.
‘Investigations can go on for a year or more, the time it takes to repair the damage takes much longer.
‘Sadly, as it is in the home insurance business, sometimes the value of investment in training is only realised after the roof has fallen in.’