Finland’s Banking Industry Faces Compliance Challenges in Post-Pandemic Era

The COVID-19 pandemic has had a profound impact on Finland’s banking industry, forcing institutions to adapt rapidly to new operational needs while maintaining compliance with regulatory requirements. As the country navigates the ongoing health crisis and its economic aftermath, banks are facing significant challenges in meeting changing regulatory expectations.

Top Compliance Risks Confronting Finnish Banking Industry

A recent report from KPMG highlights the top compliance risks confronting the Finnish banking industry in 2021:

Redeployment of resources: The need to rapidly adapt to new operational demands has led to a redeployment of resources, making it challenging for banks to maintain compliance with regulatory requirements.
Reprioritization of compliance activities: Emerging disruption risks have forced banks to reprioritize their compliance activities, diverting attention away from existing regulatory obligations.
Rapid roll-out of complex government stimulus programs: The implementation of complex government stimulus programs has created ongoing iterative changes, making it challenging for banks to maintain compliance.

Investment in Technology-Enabled Compliance Solutions

The pandemic has accelerated the need for banks to invest in technology-enabled compliance solutions, including:

Automated analytics: Using data analytics to identify and mitigate compliance risks.
AI: Leveraging artificial intelligence to automate routine compliance tasks and improve risk assessment.
Digitized data: Digitalizing data to improve transparency and reduce the risk of errors.
Processes: Implementing streamlined processes to ensure efficient and effective compliance.

Regulatory Expectations

Regulators expect banks to evaluate their compliance programs on an ongoing basis, linking them to enterprise risk management and revising them based on operational data and lessons learned. To address these challenges, banks must invest in adequate resources for the compliance function, including:

Staffing: Ensuring sufficient staff to manage compliance activities.
Training: Providing regular training to ensure staff are equipped to handle compliance responsibilities.
Structure: Establishing a clear organizational structure to support compliance efforts.
Stature: Maintaining a strong reputation and credibility in the market.

Prioritizing Compliance Efforts

Experts warn that regulators will be closely examining the effectiveness of compliance programs in Finland’s banking industry, with a focus on technology-enabled solutions, ongoing evaluation, and alignment with enterprise risk management. As the country continues to navigate the post-pandemic landscape, banks must prioritize compliance efforts to avoid potential risks and maintain public trust.