With the landscape of global regulations in flux for the past decade, some financial services companies have added compliance functionality on top of their existing technology infrastructure, creating inefficiencies and disjointed communication. Others are procrastinating.
Both approaches create compliance gaps—which could grow into expensive chasms.
Financial services firms will not be able to wait out this current period of difficulty without taking decisive and, in some cases, bold actions.”15Deloitte
Two looming regulations may have a particularly acute impact on industry HR teams:
Determining exactly how much money each employee earned in every location becomes complex when considering different states’ tax codes. For instance, any nonresident who works in Louisiana must file a Louisiana tax return, if he/she files a federal tax return.
To avoid penalties, proper data capture and integrity must be ensured. Inconsistent self-reporting by employees via manual timecards can be replaced by automated monitoring of travel logs. And a combination of geofencing and RFID can track and automatically record the location of an employee’s badge.
The General Data Protection Regulation takes effect on May 25, 2018. It grants individuals the right to access their personal data, on demand and free of charge and the right to demand a company erase their data. It also requires some organizations to appoint a data-protection officer.
Financial services companies—including U.S. firms doing business in Europe—need HR software with multilayered data security and the ability to track training and certifications of key employees. While some provisions are still unclear, consider this: An entity that fails to comply may face fines of up to 4 percent of its annual revenue.