St Giles the professional indemnity insurance broker has recently set out reasons why COLPS needs technology to help them comply with the regulatory burden they face.
In 2011 the SRA moved away from prescribed rules to outcomes-focused regulation. As part of this move, firms need to nominate a Compliance Officer for Legal Practice (COLP) and a Compliance Officer for Finance and Administration (COFA). These compliance officers are responsible for ensuring that the firm has systems and controls in place to comply with the regulations.
Firms must nominate their compliance officers to the SRA between 31 May and 31 July 2012. The SRA expects to approve nominations from 1 August 2012 until 31 October 2012. It is from this point that COLPs and COFAs must begin to fulfil their duties.
This is an opportune time for firms to evaluate their compliance and control systems. Compliance programs must meet the increasing needs of firms to perform better, dig deeper and provide broader coverage. To assist their COLP, leading firms are already embracing technology that can help them manage their day-to-day compliance functions and meet these new expectations.
New technological tools make compliance in the high-risk areas of residential and commercial property law both more effective and more efficient. Compliance technology can help utilise existing resources and can extend the breadth and depth of coverage.
Technological tools can make the duties of the COLP much easier to fulfil. They can be used to automate manual processes and maintain audit trails, improving efficiency, precision and overall effectiveness. It can also allow the COLP to focus on the analysis of results and the identification of potential breaches.
As firms deal with the demands for more assurance over compliance and with growing regulatory demands for information, technological tools can provide a robust foundation for a firm’s compliance strategy.
Those firms who do not utilize the technology available to modernize compliance procedures may find that they are not meeting industry ‘best’ practices or even industry ‘standard’ practices, especially as use of technology continues to grow. This could lead to issues demonstrating insurability to potential PI insurers or panel managers. As lending panels shrink this may be another way for lenders to limit their risk.
Ten reasons why firms should consider integrated compliance optimization technology into their compliance programs are:
1. COLPs and COFAs can spend more time on the analysis of data, instead of information gathering
2. Increased efficiency leading to cost reduction
3. It enables the management of identification of conflict of interest, which is a key area of the Code
4. Accuracy of the data collected is enhanced as human error is limited
5. It demonstrates to the SRA a prudent, responsible compliance culture
6. New infrastructure, especially web based services, can scale quickly as the business grows
7. It allows for issues to be tracked uniformsly, elimating ad hoc records
8. It can identify important training requirements
9. It may make the firm less of a risk, and therefore more attractive to PI insurers
10. It reduces the burden of inspections as predesigned reports are automatically generated, which can then be downloaded at the request of the SRA
As COLPs begin the job of making their firms compliant, it is wise to consider the impact of any new technologies and processes on the firm. The technology should enable firms to make their processes more efficient, but need to be chosen carefully to make sure that it is the best fit for the firm.
St Giles are running 12 free CPD seminars in different locations across England in May June and July on Compliance, focusing on the high risk area of conveyancing. More information can be found at http://www.stgilesgroup.co.uk
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