Why Companies Should be Mindful of Their Compliance Unit

We often hear about compliance in context of business terminologies. But what does it really mean? There is usually always a unit or department in every single bank, financial institute, or brokerage firm specifically established for and dedicated to ensuring compliances with all the rules, regulations, and applicable laws. The compliance is a wide and encompassing term. It covers a huge range of responsibilities and roles within a functional establishment.

Depending on the nature of business of the financial institute, the compliance responsibilities in Hong Kong can range from monitoring trading activities, ensuring compliance with regulators, and preventing conflict of interest to avoid money laundering schemes, and possible tax evasion at large banks. It is not very likely that the compliance unit in an establishment is going to be a very popular one. Despite that, this department has a lot of importance and significance in securing and maintaining the overall reputation and integrity of any firm.

The credit crisis of 2008 made it all the most crucial for firms to increase regulatory oversight with the compliance responsibilities in Hong Kong. That crisis has led to great demand for companies to hire experienced compliance managers and staff. Some companies have an entire unit dedicated for it.

The cost of compliance is spiraling upwards; especially during the last few years. The cost of non-compliance can be huge for a financial institute as well. However, non compliance can lead to huge penalties and stiff monetary fines. Let's not forget it can also badly influence the reputation of a firm and may also result into regulatory and legal sanctions.