A positive attitude

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11 August 2003

Chennai: 'Charity begins at home,' goes an old and very popular adage. A child cultivates strong ethics by strict adherence to his parents' principles, which later on helps him to carve a niche in society as a well-reputed person.

Similarly, financial services institutions also face challenges in embedding ethics and compliance into all systems, processes and procedures so as to safeguard their reputation in the industry.

Compliance was not considered as a core part of management functions until some years ago. As regulators are demanding proof of robust compliance controls and enhanced levels of management oversight, firms have started considering an effective organisation-wide compliance function as a critical management tool.

Inside glimpse
Compliance can be defined as the management function that respects and abides by all the industry-related regulations. The definitions of compliance and risk management have been always seen to overlap, but each function has very different outlines. Compliance focuses primarily on insuring that all rules and regulations are followed while risk management focuses on insuring that risks are understood and that proactive decisions are made as to which risks to take.