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Compliance and Control

Treasury Taking on a Greater Role in Compliance Management

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October 09, 2019

Fri Reg and Accting - Law BooksA surprising percentage of companies have no plan in place for monitoring and/or managing regulations, while more of that responsibility has shifted to the treasury function.

In its 2019 Compliance Survey, Peachtree City, Ga.-based Strategic Treasurer found that one in three companies has no plan in place for monitoring and/or managing ever-increasing regulations. Among companies that do, the treasury function is increasingly taking on that role in some capacity—over half today, compared to just a third of companies in last year’s survey that said they use treasury for that purpose.

“More companies’ treasury groups are getting involved in regulations and compliance, and that shows healthy progress by some firms,” said Craig Jeffery, managing partner at Strategic Treasurer.

When monitoring is in place, only 31% of large companies assign it to an individual in treasury, and only 16% of companies have a dedicated regulatory team or person at the corporate level.

Tech underutilized. The survey also found that companies do not appear to be taking advantage of available technology to automate aspects of compliance. In fact, 76% of the 150 respondents reported that they do not leverage a technology solution that provides compliance-related functionality or modules.

Mr. Jeffery said that high percentage was surprising, given that most treasury management systems (TMSs) today offer compliance-related modules, and that there are stand-alone solutions as well.

“It takes time to adapt to new regulations, but given the level of regulations today, that so many don’t have solutions in place to help them is a concern,” he said, adding that is especially so given two-thirds of responding companies said they anticipate regulations increasing in the next one to two years.

Other survey findings include:

  • Know your customer (KYC) requirements generate the most concern, and were cited by 72% of large companies, while 66% cited FBAR reporting about foreign accounts.
  • However, among companies that do have compliance-related solutions, only 50% help with FBAR and 36% with KYC.
  • Bank account management (BAM) is seen by 69% of respondents as the area most in need of solutions to facilitate compliance management.
  • Dedicated BAM systems are used by 26% of large companies, and 28% use a SAAS or installed TMS solution.
  • Only 18% of large companies have fully automated the FBAR process, with 44% partially automated.
  • 23% of large companies have a SWIFT identifier code, and 13% use a SWIFT service bureau.
  • Staff security training is feeble. Only 13% of responding companies provide annual training on customer security programs, while 17% have set up a one-time training session, 25% are in the process of developing training, and the rest either do not offer or plan to offer training, or they’re unsure

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