Since the start of the COVID-19 crisis, individual roles and responsibilities in the financial services have changed considerably. Many personnel find themselves in internal decision-making roles or in charge of procurement which could inadvertently lead to non-compliance. In the midst of all this, it’s important to consider the risks associated with gifts and entertainment, as well as bribery and corruption more generally.
A disparate workforce and high transaction levels could lead to distraction in many firms. Poor decisions made now are likely to emerge later as risks, with regulators like the FCA already stating that COVID-19 will not serve as a reason for non-compliance. Firms of all sizes must continue to maintain oversight, compliance, and reporting.
“Firms should take all reasonable steps to meet the regulatory obligations which are in place to protect their consumers and maintain market integrity.” Financial Conduct Authority, Coronavirus Information for Firms
While COVID-19 restrictions may impact traditional forms of business entertainment such as sporting events and in-person dining, there is growing concern regarding the lack of visibility into gift-giving for virtual events and the resulting impact on anti-bribery and corruption (ABC) compliance.
It’s likely difficult for firms to put additional oversight in place, and indeed some may prioritise expediency ahead of controls. This would be short-sighted and can lead to exposure. To avoid this, we’ve compiled a list of immediate and long-term considerations that can help your firm confront risks related to bribery and corruption.
Let’s begin with some immediate considerations
- Ensure every employee with decision-making capabilities understands company policy related to G&E and takes on appropriate training
- Put someone in charge of compiling a G&E log that includes a description of all virtual functions attended, with receipts attached
- Implement temporary mandates or restrictions on discretionary expenditure to avoid unnecessary exposure
At this point, accountability should be clear and ambiguity should be removed. Despite the current remote work environment, firms still need to ensure their people and processes are compliant.
Looking ahead: The long-term view
In addition to short-term steps, your firm should also have a long-term plan. Here are some recommendations for key focus areas:
- Consider how RegTech can help support G&E compliance by streamlining the reporting and per-approval process
- Ensure that post-crisis reporting is accurate, timely, and ready for scrutiny, so you can show to regulators that you have an evolving G&E policy in place