1. A rise in Compliance Accountability and Enforcement
With the surge of claims around misconduct, sexual harassment, discrimination, we can expect 2018 to bring a rise in the review and revision of the regulations at a statewide level. Companies will most certainly respond by reviewing their policies and addressing the issues through targeted training, especially with a spotlight on leadership accountability.
“I expect that 2018 will bring a renewed focus on Leadership Responsibility of Corporate Culture, and how this accountability plays in driving the business. Compliance issues will no longer be viewed as just a legal issue but a business and reputational issue, and this starts with leaders taking ownership, listening up and setting the tone for behavior accountability. The patterns of allowing and/or ignoring inappropriate conduct are being pressure tested under the microscope of today’s standards of full transparency. Gone are the days of corporations…or even Congress, going to great lengths to pay out settlements to protect valuable brand and reputational assets from making their way into the headlines.” – Marsha Ershaghi Hames, Managing Director, Strategy & Development at LRN
2. Growth in security frameworks for defending against cyber attacks.
In 2018 cybersecurity will continue to be a hot topic, but the conversation and planning will escalate from compliance and IT departments to boardrooms. Every industry (regulated or not) that has been impacted by cybersecurity-related breaches, especially finance, will follow cybersecurity-related regulations, guidelines, and specifications closely, to look for industry-wide frameworks for defending their organizations against cyber attacks.
“Moreover, cybersecurity will be on the forefront of regulators’ agendas as they prepare their oversight plans for the upcoming year” – Carla Carriveau, Senior Managing Counsel, Wealthfront Inc.
3. We will see the standardization of KYC requirements
In 2018, Financial services companies will take advantage of Blockchain based solutions to address Anti-money laundering perils. Regulations driven by KYC requirements will force crypto-currencies to modify their existing approaches of user anonymity and to provide visibility and oversight to help foster usage and uptake within global financial markets. Look to FINCEN to collaborate across international boundaries to set forth standardization of KYC requirements, which could then enable using the digital trail as a superior replacement to the fiat paper trail, enabling transaction transparency to help tackle money laundering.
“While it is difficult to consider cryptocurrencies as anything other than value with Bitcoin touching $11,000, there will be an inflection point that will provide an opportunity to strengthen financial crimes compliance utilizing distributed algorithmic ledgers. We will begin to see the emergence of and proof that blockchain solutions can “solve” for identity management and verification in traditional financial institutions. This will be a boon for compliance professionals. Financial services, in general, will advance as well with the ability to offer “frictionless” onboarding of clients and curated product development while maintaining complaint business practices.” – John McCarthy, Senior Vice President & Deputy BSA Officer, Bank of the West.