Compliance 2021: Where Are We Now?
Posted On: 03 Nov 2021
Knox House Trust (“KHT”) is proud to be an Isle of Man company. The Island boasts more than 50 years as a finance centre, and one which is internationally respected for its progressive regulation and strong governance.
Operating to the highest standards of service and commercial integrity are core values that our business has aspired to since our inception in 2011. As an experienced Trust and Corporate Services Provider (“TCSP”), it is our duty to protect our clients, and the reputation of the jurisdiction by preventing and detecting financial crime and ensuring compliance with all legal and regulatory requirements.
In our 10th anniversary year, our busy Compliance Team have been reflecting on what has changed during a turbulent few years owing to the COVID-19 pandemic, and share the latest news on future developments.
Where are we now?
The past two years have provided new challenges to the way business is conducted on a global level. Government mandated measures to combat the COVID-19 pandemic put immense pressure on the economy and the demand for alternative solutions to the way “normal” business could be done. The transition from working daily in the office to working remotely created a demand for global digitalisation of business processes and operations, regardless of business type or size. Risk management in particular had the added pressure, to accommodate these new remote ways of working, yet still maintain safe and compliant methods. Whilst technological advances helped to lead the way, offering up a variety of online platform solutions, it was definitely not without complications!
However, in light of these challenging times, our business adapted swiftly to the changes imposed and we were able to retain robust internal controls. Regardless of where our team worked (home or office), they remained vigilant to the ongoing needs of our clients’, and in identifying and mitigating potential risks. Needless to say, communication was more critical at this time (dare I say the Zoom word!), and the fact that we are small team had its advantages.
Regulatory Marketplace
In addition to our own vigilance throughout the pandemic, our regulatory body, the Isle of Man Financial Services Authority (‘IOMFSA’) also rose to the challenge and ensured continual support to the Island’s financial sector. Providing instructive assistance and support, which greatly aided our ability to quickly adapt compliance processes more easily in order to overcome the challenges/restrictions created by these new ways of working.
We also witnessed the wider business community coming together to support each other. Like ourselves, most businesses were keen to find workable, compliant solutions which benefitted the client, and were therefore more willing to share knowledge and success stories of what was working for them. Increased use of webinars and other online social events became the norm. Even now, a collaborative culture remains as both businesses continue to navigate the economic impacts of both the global pandemic and the aftermath of Brexit. With digital forums and online events still gaining traction, though as the restrictions eased at the end of the summer, most people were keen to return to face to face interactions where possible.
Risk & Compliance is by nature a changeable landscape, so we are well versed in the need to be proactive and regularly review business models and procedures. So, whilst the pandemic brought about unprecedented restrictions and a totally new working environment. The same disciplines applied with regards to our team’s response to it, to ensure that our services remained efficient, effective, and compliant – and always with the needs of our clients’ at the very core.
What Next
Most recently, the IOMFSA announced the imminent release of new TCSP sector specific guidance, which forms part of their revised ‘Anti-Money Laundering and Countering the Financing of Terrorism Handbook’. Such guidance gives firms such as KHT the opportunity to ensure that our practices are both pragmatic for clients and are in line with the relevant risks to our business. These updated guidelines are part of the Island’s ongoing commitment to meet international industry standards.
About a year ago, the European Commission initiated a plan to further strengthen the EU’s fight against money laundering and terrorist financing, part of which is their desire to create a single rule book.
Furthermore, the Isle of Man’s Cabinet Office has published their updated ‘Financial Crime Strategy’, which once again strives towards compliance with international standards and continue the promotion of the Island as a highly regulated and compliant jurisdiction.
Our Compliance Team will be continually monitoring the progress and changes made by our regulators and government to ensure that our processes remain compliant and in line with best practices.
Next Steps
The risk and regulatory landscape is changeable at the best of times, but throw a global pandemic into the mix and who knows what to expect! Change is nothing new to the financial sector, but with the additional challenges of Brexit and the economic recovery, a new ‘normal’ is still some way off for many.
As we reflect and take stock of our 10 year success story, we have found that our core values have guided us well. Putting clients at the heart of everything we do, ensuring we deliver the highest standards of service and commercial integrity and being open to collaboration has served us well.
As we head into a new chapter in our story, our fundamental beliefs remain at our core, and with that our unwavering commitment to promote a strong compliance culture. One which implements best practices and ensures it protects both our clients and our business not just for today – but for the next decade and beyond!