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The Foundation of Strong Compliance – The First Line of Defense

The shift in the regulatory landscape for financial institutions has touched nearly all of our management consulting engagements over the past few years, either directly or indirectly. In an effort to meet and prepare for ongoing regulatory requirements, it will be necessary for organizations to have a robust control framework to ensure all processes and procedures are in line with regulatory expectations.

Many organizations have prepared by implementing a “3 lines of defense” control framework. This approach has the support of both the Basel Committee on Banking Supervision and the Institute of Operational Risk as well as banking regulators. Based on Bridgeforce’s experience in risk management consulting, we recommend the foundation of an effective “3 lines of defense” control framework is housed in the first line of defense because of the need to “self-identify” errors before they impact customers.

The first line of defense should include four primary groups of compliance and control activities:

  1. Risk Control Self Assessment (RCSA)
  2. Prevention
  3. Detection
  4. Corrective Action

Download the full special report to read more on the types of activities and actions you can take to implement a robust control framework to ensure compliance readiness.

Category: Compliance