The Fine Print is Critical: Reducing Risk and Penalties with Disclosure Traceability

The Fine Print is Critical: Reducing Risk and Penalties with Disclosure Traceability

In today’s heavily regulated financial landscape, banks face increasing pressure to comply with stringent and ever-changing regulations while enhancing transparency and responding quickly to inquiries from regulatory bodies.

They say the best defense is a strong offense. It’s far better to ensure disclosures are accurate before they go to market than to deal with the aftermath of an error.

But what happens when an erroneous disclosure does make it to market?

Naehas blog fine print critical image2The credibility of a financial institution is, in part, linked to the accuracy of its disclosures. Inaccuracies can trigger customer complaints, investigations, and regulatory scrutiny, leading to severe consequences such as significant fines, sanctions, or other enforcement actions.

And when things do go wrong, regulators don’t provide days or weeks to respond to inquiries – they often want a detailed account within 24 hours. If a response isn’t received, the penalties increase. The maturity level and transparency of a financial institution’s marketing operations is critical in responding to regulatory inquiries.

These challenges extend beyond the regulatory realm. They directly impact customers’ trust and the reputation of the organization. Quickly identifying the source disclosure content under scrutiny is critical. Furthermore, maintaining a historical record of the path the content took to market–every edit, every approval–is crucial to avoid penalties and a damaged reputation.

Having the tools to quickly trace an error back to the source and review a detailed audit trail is vital to the success of a disclosure management solution.

Challenges in Disclosure Management

The ability to respond quickly to errors is a formidable challenge for many banks. Locating and correcting errors in a disclosure is especially difficult when disclosure content is managed through manual, spreadsheet-based, or other outdated processes.

Adding to the headache, each individual content fragment within a disclosure can have its own lifecycle, author, and review team. These fragments can be written in multiple languages, tailored to regulatory conditions in different countries, and used across multiple channels. All of these aspects contribute to the challenge of creating, maintaining, and reporting on disclosures.

Leveraging Traceability for Compliance

While we strive to help banks avoid erroneous disclosures in the first place, Naehas also recognizes the importance of having a reliable and efficient response plan that can be used in the event that an error does go to market. We empower organizations to identify and rectify errors promptly, preventing potentially higher fines and safeguarding their reputations.

Naehas blog fine print critical image1Naehas’ traceability feature, built into our Disclosure Management solution, helps financial institutions quickly locate erroneous disclosures, view the approval history, and, importantly, identify all places where those disclosures are used. This enables financial institutions to demonstrate a clear and documented path of compliance within the Disclosure Management process. Additionally, it aids in executing “recalls” and preventing future incidents related to disclosures. The speed of response enabled by the Naehas platform is critical to communication with auditors.

Naehas sets a new standard in disclosure management, offering a technologically advanced solution that ensures transparency, accuracy, traceability, and compliance in the face of evolving regulatory challenges.