In today’s supervisory landscape, compliance is no longer a box-ticking exercise. Compliance means meeting expectations. Financial institutions are increasingly – and more explicitly – challenged on whether their policies, procedures and control measures actually function in practice. Not only by legislators and supervisors, but also by their boards and, where applicable, internal supervisory bodies.
As a result, the core question shifts from “have we designed it?” to “does it work as intended?”
Compliance auditing plays a key role in answering that latter question.
A well-designed and properly executed compliance audit provides independent and expert insight into the effectiveness of the compliance framework. It helps organisations to:
Compliance auditing is therefore not an end in itself, but a tool for insight, control and improvement – towards supervisors, but equally towards management, oversight bodies and the wider organisation.
Legislation and regulation are becoming more complex and increasingly embedded in day-to-day operations. Consider topics such as DORA, GDPR, AML/CFT and PSD3. At the same time, supervisory expectations continue to rise: institutions are expected not only to be compliant, but also to demonstrate this clearly and consistently.
For many organisations, this places pressure on existing structures – particularly where capacity is limited or where compliance and/or audit functions are not, or only partially, in place. In such cases, independent and expert assessment can be instrumental in maintaining oversight and setting clear priorities.
Dutch supervisory legislation recognises the importance of an internal control or audit function. Depending on the nature and size of the institution, this function may be mandatory or fulfilled on a proportional basis. In practice, this means that smaller or more specialised institutions do not always have a structurally embedded internal audit function.
Nevertheless, supervisors such as DNB and the AFM emphasise that independent and objective assessment is essential for demonstrable compliance – not as a one-off exercise, but as a continuous element of good governance. This is particularly relevant in an environment where regulation, products and processes are constantly evolving.
In practice, compliance auditing can be deployed in various ways, for example:
It is essential that observations and recommendations do not remain confined to reports, but are translated into concrete, feasible and testable improvement actions that align with the organisation’s context and capabilities.
Well-executed compliance audits bring reassurance. They give board members and other responsible stakeholders confidence that risks are understood, control measures are effective and the organisation is prepared for change.
Projective Group NL supports financial institutions in independently and expertly assessing and strengthening their compliance frameworks. Not at arm’s length, but in close collaboration with the organisation, with a sharp focus on context and practical applicability. Our consultants combine in-depth regulatory knowledge with hands-on experience and remain involved until it is clear what can be improved – and what actually works to achieve that improvement.
Those who approach compliance auditing as a means to enhance insight, control and improvement lay a solid foundation for demonstrable, sustainable compliance. And that is exactly where the conversation begins.
You are welcome to have this conversation entirely without obligation with our consultant Gerard Jong, reachable via +31 6 1186 7508 or gerard.jong@projectivegroup.com.
