The implementation of compliance programmes by Australian financial services companies is being hindered by a lack of resources, the perception compliance is not core business and management resistance to compliance initiatives, an Ernst & Young survey has revealed.
61 per cent of respondents to the National Legal Compliance Survey cited lack of resources as the main obstacle to implementation of an effective program, while 39 per cent indicated that legal compliance was not considered core business despite the looming March 2004 deadline for attaining a licence under the Financial Services Reform Act (FSRA). Other findings in the survey included the revelation by 45 per cent of respondents that compliance procedures were not embedded into operational procedures and 42 per cent revealing that lack of staff understanding was an issue.
The survey was based on the Australian Standard 3806-1998, which according
to the head of Ernst & Young's compliance advisory practice, Lucienne Layton
"is increasingly recognised as the starting point for implementing an effective
legal compliance program".
Layton also noted that there remains a large proportion of management and staff
in the financial services industry (24 per cent) who are resistant to the implementation
of legal compliance programs.
"While this percentage is balanced out by people who actively and proactively engage in compliance, organisations need to find a way of re-branding compliance in a positive way and getting the laggards on board," Layton said.
Additionally, and despite 95 per cent of respondents revealing that they had a dedicated compliance manager, the survey also hinted at a general lack of board-approved compliance documentation, as 61 per cent of respondents did not have board-approved compliance mandates and compliance policies.
According to Layton this documentation is considered critical to implementing a systematic compliance program and ensuring that staff know what they need to do.
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