How to deliver successful regulatory remediation programmes

Large regulatory remediation programmes are inevitable in any financial institution, but even the most diligent and experienced teams struggle to deliver them.

In this article, BeyondFS Partner Matt Neill highlights key learnings from our recent white paper, ‘Fine Prevention: Why financial crime and regulatory programmes fail and how to fix them’ which explores why programmes fail, and what can be done to deliver success, achieve the stated objectives and build frameworks for ongoing compliance.

Avoiding serious problems

Characteristics of remediation programmes

Remediation programmes tend to address shortcomings in three main areas:

Compliance and risk management: This includes missing risk assessments or inadequate controls that violate regulations.
Data and documentation: Inaccurate or outdated information that needs correction to meet compliance standards.
Culture and practice: Ineffective compliance frameworks, often due to a mismatch between written policies and real-world behaviour.

Poorly handled remediations can result in serious problems, such as increased compliance costs due to haphazard fixes that address symptoms rather than root causes, and excessive staff turnover caused by high programme intensity and the pressures that accompany repeated delays or failure to achieve objectives over a long period.

Why Remediation Programmes Fail

Institutions rarely approach remediations in a way that is suited to their unique regulatory demands. They normally structure them like regular change programmes, with the additional handicap of a knee-jerk, reactive approach.

When a remediation is triggered by unexpected issues like internal audit findings, the initial urgency to fix these problems quickly fosters unrealistic expectations. Project teams overpromise quick solutions under pressure from senior management, setting themselves up for under-delivery.

Pillars of Successful Remediation Programmes

To ensure success, financial institutions need to develop a robust programme delivery framework with these elements:

1. Methodology: A clear framework that defines programme scope, objectives, success metrics, roles, and closure criteria. Best practices and lessons learned from previous remediations should be incorporated.

2. Governance: Defined communication channels, stakeholder engagement strategies, and a process for managing interactions with regulators.

3. Skillset Assessment: Evaluate internal teams' capabilities and identify resource gaps. Access talent and expertise to spearhead these projects effectively.

Effective Programme Management

We recommend three critical tools to embed in a remediation programme from the outset:

Programme Management Office (PMO): acts as the programme's central hub, providing guidance, leadership, and progress updates. It facilitates decision-making on resource allocation and conflicting priorities.
Definition of Done (DoD): a set of agreed-upon criteria that each workstream must meet before completion. This ensures clear goals and prevents scope creep.
Programme Closure Framework: defines the steps necessary for closing milestones and workstreams. This allows stakeholders to effectively challenge decisions and encourages speedy resolution.

Reach out

BeyondFS Can Help

BeyondFS offers end-to-end support for regulatory-driven programmes, from initiation to delivery. We have considerable first-hand experience across multiple clients and projects, and are well placed to help organisations which need to improve their AML and regulatory change capabilities. We are frequently brought in part way through change programmes which are off-track or failing, and have a strong record of putting these programmes back on track swiftly.

Our white paper, ‘Fine Prevention: Why financial crime and regulatory programmes fail and how to fix them’ explores the reasons for remediation programme failures and how to achieve success.

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