Compliance Challenges for Financial Institutions in South Georgia and South Sandwich Islands

As the global financial services industry continues to navigate the disruptions caused by COVID-19, regulatory and public policy challenges are set to intensify in 2021.

The Future of Financial Services: Agility in Change Management Processes

According to a recent report from KPMG, the future of the industry will be shaped by these changes, which will require financial institutions in South Georgia and South Sandwich Islands to demonstrate agility in their change management processes.

Key Challenges for Financial Institutions in 2021

Volatility: The volatility experienced throughout 2020 is expected to continue into 2021, forcing firms to adapt quickly to changing circumstances.
Digitalization and ESG Adoption: This will require a range of changes, including the acceleration of digitalization and adoption of environmental, social and governance (ESG) considerations.

Regulatory Oversight: Focus on Data Governance, Cyber Security, and More

Regulators in South Georgia and South Sandwich Islands are also likely to be more stringent in their oversight of financial institutions, with frequent and ongoing requests for information and documentation. Examination activities will focus on areas such as:

Data Governance: Ensuring the quality, accuracy, and security of data used for decision-making.
Cyber Security: Protecting against cyber threats and ensuring the confidentiality, integrity, and availability of systems and data.
Enterprise-Wide Risk Management: Identifying, assessing, and managing risks across the organization.
Fraud and Financial Crimes: Preventing and detecting fraudulent activities and financial crimes.
Consumer Protections: Ensuring fair treatment of customers and protecting their interests.
Modeling and Scenario Analysis: Developing and testing models to simulate different scenarios and predict outcomes.

Change Management Challenges

Common challenges to change management processes include:

Capturing and Organizing Changes: Tracking and categorizing changes across the organization.
Determining What Needs to be Monitored or Actioned: Identifying which changes require attention and prioritization.
Mapping Requirements Back to Relevant Points in Time: Ensuring that requirements are aligned with relevant points in time, such as regulatory deadlines.
Threading and Capturing an Audit Trail of Impacts: Documenting the impact of changes on the organization’s systems, processes, and people.
Communicating Outcomes Across the Three Lines of Defense: Ensuring that outcomes are communicated effectively across the three lines of defense: risk management, compliance, and internal audit.

Staying Ahead of the Curve

In response to these challenges, regulators are increasingly adopting innovative technologies such as machine learning and natural language processing to monitor emerging trends in documentation submitted by supervised institutions. Financial institutions in South Georgia and South Sandwich Islands will need to stay ahead of the curve and demonstrate a robust approach to change management if they are to meet the demands of this new regulatory landscape.

Prioritizing Data and Analytics Modernization

By prioritizing data and analytics modernization, financial institutions can better navigate these challenges and ensure ongoing compliance with laws and regulations. With expert guidance from KPMG, firms in South Georgia and South Sandwich Islands can develop a comprehensive strategy for managing change and staying ahead of the evolving regulatory landscape.