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Compliance Strategy: Does Your Policy Need a Tune-Up?

2 min read
May 18, 2023

In the world of financial institutions, policy is the backbone of operations. It defines compliance strategy and standards, guides behavior, and defines how business should be conducted.  

But like any other crucial element of an organization, policy is not static. It evolves and changes in response to the shifting landscape of regulatory norms, institutional goals, and market dynamics. As a compliance professional, it's essential to know when it's time for a policy tune-up. 

Signs Your Policy Might Be Due for a Tune-Up 

A well-maintained policy is up-to-date, relevant, clear, and effective. Here are eight signs that your policy might need a review and update: 

1. The policy has not been revised or re-approved in more than a year.  

Regulatory environments and business needs evolve continually. If your policy hasn't been reviewed or updated in the last year, it's time for a tune-up. 

2. Multiple versions of the policy are circulating.

This can lead to confusion and inconsistent practices. A unified, updated policy is key for smooth operations and compliance. 

3. The policy contains addendums not yet incorporated into it.  

Regularly integrate addendums into your policy to ensure its coherence and accuracy. 

4. The policy contains misspellings, typos, and grammatical errors.  

These can undermine the credibility of your policy and cause misunderstanding. 

Related: 6 Essentials for Flawless Policy Management 

5. Outdated functional titles are still in the policy, or new titles have not yet been included. 

Update these to reflect the current structure and roles within your organization. 

6. The designated trade territory in the policy is outdated.

Update this to reflect the areas currently served, removing those that are no longer served and adding new areas served. 

7. Discontinued products and services are still in the policy, or new ones have not been included.

An updated policy should reflect the current offerings of your institution. 

8. Superseded regulations are still in the policy, or new ones are not yet included. 

Ensure your policy is compliant with the latest regulations to avoid legal and reputational risks.

Beyond Out-Of-Date Policies: Deeper Issues to Address 

Out-of-date policies can be symptomatic of deeper organizational issues that require your attention. Regular audits and testing can reveal gaps between policy and practice to help you recognize if a policy needs to be updated or whether staff needs to re-dedicate themselves to policy enforcement. 

For example, if your policy says one thing but employees are doing something else, there’s a chance that your policy may not be practical or is being ignored. This finding highlights the need for policy review, staff training, or both. 

An audit might uncover increasing numbers of policy exceptions. Frequent exceptions can indicate a policy that's too rigid or out of touch with business realities. Audits and testing might also find that policy limits are breached without accountability. This could signify a lack of awareness or disregard for the policy, emphasizing the need for improved communication, enforcement, and potentially policy revision. 

As a compliance professional, recognizing these signs is the first step in ensuring your financial institution's policy is robust, relevant, and effective. A policy tune-up is not just an act of maintenance, but an opportunity to drive improvement, mitigate risk, and support your organization's strategic goals 

Remember: An up-to-date policy is a powerful tool for fostering compliant, efficient, and successful operations. 


Want more insights and advice on policy management at financial institutions? Download our whitepaper Policies as a Power Tool: Creating Policies that Get the Job Done. 



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