The Importance of Compliance in Finance – Viewpoints by Scott Tominaga
One important thing we need to consider in terms of managing finances and planning investment in compliance. In recent years, all the lenders, banks, and investment avenues have been forced to clean up their acts to ensure compliance. Let us explore why compliance is important now. It is unfortunate that many people are completely ignorant about its need, and without compliance, it may become difficult to thrive in the financial landscape.
Scott Tominaga commenting on the breach of rules
Scott Tominaga is an expert financial advisor who explains here the need for compliance in light of the global financial crisis in 2008. Many of the economies got destabilized during the crisis, which was basically breaching the rules. This was allowed to happen through the loopholes which were previously existing. Going further, the bad debts may get packaged up and sold as one. Financial institutions will not be able to allow this to happen once again, and over the last couple of decades, compliance remained a major driver behind any new financial operations.
Banks had always remained as a major business sector, but we have seen it is more so than ever before over the last couple of decades. Banks started to compete and brought out a wide range of financial products to sell. However, unlike many private lenders, banks have an increased focus on ensuring that proper compliance is met while administering all these products. This is not just to protect the interests of the banks but also to protect the customers and stakeholders.
A scandal to note
There was a PPI scandal about nine years ago, with which it was uncovered that the banks and the lender were selling different payment protection insurance without offering the borrowing person the money to opt in. This resulted in a huge payout from the money lenders and banks. Giving back money that was taken secretly from those who took out loans. Again, this had been something that just could not have been happening. That is why things have changed later to ensure compliance and additional due diligence and security in terms of money lending.
Wrapping things up
Many people take compliance is all about simply protecting customers who are into financial transactions, but it is actually meant to protect the lenders and financial institutions who deal with the finances. It also protects the providers against the adverse impact of wrongdoing by fraudulent borrowers and defaulters. It also protects the lenders from any kind of lawsuits that come in their way later. Compliance had also made it more difficult for the banks, lenders, and borrowers to commit any fraudulence or criminal activities, which in turn help all the users too.
In real practice, as Scott Tominaga points out, compliance has many layers of assurance, which is essential for modern world financial transactions. As the year progress, more potential challenges, and threats are being popped up, compliance becomes a standard with more emphasis on security.