How companies can remain compliant even in times of crisis

The increasing escalation of the Covid-19 pandemic is affecting every aspect of society. From a financial perspective, the pandemic is causing greater operational and compliance risks. These risks have been recognised by financial authorities and organisations globally with the US Securities and Exchange Commission offering palliation and guidance to registered funds and their investment advisers. The European Commission has activated the General Escape clause in the Stability and Growth Pact, so that national authorities are free to do all they can to support their health systems, businesses and workers.

On a national level, fiscal support measures now account for around 2.2% of EU-27 GDP. For liquidity support, they total 13.7% of EU GDP.

In Singapore, the Singapore Exchange (SGX) has rolled out a S$5 million care package to provide support and relief measures amid the COVID-19 outbreak, bolstering efforts by the financial community to reinforce the city-state’s resilience as a global marketplace. The SGX Care Package comprises a S$1.5 million contribution to national healthcare-support programmes. The remaining S$3.5 million will be used to support Singapore-listed companies as well as SGX employees and contract staff, in particular frontline staff such as cleaning and security crew.

The Singaporean Government is acknowledged as being especially supportive of established RegTech offerings. This is in contrast to other governments, notably in Europe, that have been acquiescent in advocating RegTech solutions, preferring instead to identify issues without specific solutions.

Despite the pandemic, it is expected that Singapore will continue to deliver on its notoriety for being a first-class financial hub by being dedicated to ensure mostly uninterrupted operations. Singapore has been praised for taking a proactive, rather than reactive approach to dealing with the virus situation. The proactive approach reaches beyond simply following contacts of Covid-19 cases and liberal testing.The government is also supporting those who are putting their lives at risk fighting the virus, as well as helping companies survive while maintaining compliance regulations despite these unprecedented circumstances.

Compliance must be prioritised in these testing times

In light of the demands of Covid-19, Singaporean banks have unveiled plans to help companies, and other customers, with emergency relief assistance to help manage the tough, financial implications of the virus. The plans mainly targeted small and medium sized businesses to ensure cohesion and coherence whilst also continuing with their conventional financial operations.

Standard Chartered has introduced measures for clients who have asked for financial assistance to cope with the challenges. Further, DBS also unveiled a second round of relief measures to help Singaporean businesses cope with the virus outbreak by encouraging businesses to go digital. As more businesses turn digital and as all but essential services have shifted to remote working, DBS has increased its back office resources and deployed home agents in anticipation of the increase in online customers.

For most companies, the most immediate concern is one of cashflow. Simply, reduced demand caused by the virus is causing a decline in revenue which may not be able to cover operating costs. Measures to help companies include due date extension on affected businesses' trade finance bills and also the extension of bridging loans in the form of more working capital to affected businesses.

Although the Singapore government, along with the banking sector, are doing their best to attenuate the financial impact of the virus, there are still many competing stakeholder concerns to balance. In all of this uncertainty, compliance must not be ignored. Data quality, reporting accuracy and timeliness cannot be compromised no matter the situation. Centralised governance procedures must be in place, including documenting and articulating decisions by authorised personnel if faced with potential variations from ordinary levels of monitoring and control due to the global crisis.

How firms can espouse compliance despite a crisis

Leaders must navigate the challenges posed by the virus without ignoring their compliance obligations. Here are 6 pointers to ensure compliance remains a focus.

1. Ensure compliance is at the centre of your business continuity plans (BCP). Compliance needs to be factored into how you will manage compliance remotely and how security can be managed from an off-site location

2. Engage compliance personnel to ensure compliance is the centre of conversation despite exogenous disarray. This should go further too to understand processes rather than dismissing them as obstacles to business or something that can wait until later. Compliance must be visible.

3. RegTech solutions should be embraced that more efficiently help your organisation achieve and maintain compliance whilst gaining a competitive advantage through cost-reducing efficiency.

4. Along with regulatory technology, automation should also be welcomed. This eases the burden of increasingly complex and stringent regulation by freeing up skilled staff from low-value mundane compliance obligations.

5. Continual improvement via the training of employees should also be a focus. This is to ensure compliance professionals have the right skills, information, tools and mindsets to understand compliance, and their importance within it, to increase reliability and performance.

6. Perspicuous rationales and targeted timelines should be embraced to ensure a coordinated approach to effectively practice compliance and assure its position at the forefront of strategy considerations.

In such unprecedented and uncertain times, the best way to safeguard your organisation from compliance risk is to ensure compliance remains active, visible and assertive during the crisis. This will not only help mitigate against the worst of the virus' impacts, but ensure your enterprise is well-positioned in the post-virus wave of business activity.