Increasingly, compliance is seen as central to corporate strategy.
The need to rehabilitate the reputation of banks has led to a move away from compliance as a tick-box exercise and towards an embedded compliant culture throughout the firm.
Compliance in corporate behaviour, as well as in the way a firm promotes and markets itself, is essential. But viewing this as a recent development overlooks the fact that compliance has always been central to one key area of a firm’s strategy – its brand.
Why compliance is essential to your brand strategy
Your corporate brand is one of the most powerful assets your firm possesses. Brand is commonly perceived to have three main strands:
The three are closely related, and each is vital in determining how your brand is perceived. By looking at each in turn, it becomes clear how central compliance is to all three.
A brand’s reputation is built over a period of time; a strong reputation isn’t something that can be developed overnight (although it can be destroyed almost instantly by poorly-judged actions, corporate failings or perceived wrong-doings).
This is possibly the area of branding where a compliant approach is most crucial. If a firm suffers reputational damage by consistently failing to comply with regulatory requirements, its brand will suffer. Client and public confidence in the organisation will falter, as its inability to comply with regulatory demands will be regarded as indicative of wider failings in its corporate values.
Compliance plays a central role here. Not only does the Compliance team police the way a firm talks about itself in its marketing collateral and other financial promotions, they are closely involved with product development. Compliance sits at the heart of the business in terms of the products and services the firm offers, as well as the way they are marketed.
Making sure the solutions you offer are robust, and meet the Financial Conduct Authority’s requirements around Treating Customers Fairly policies (TCF) is essential.
Image is often seen as more short-term than reputation. It can be influenced by current marketing campaigns and is widely viewed as the preserve of the Marketing team. But again, Compliance plays a vital role here. The way products and services are promoted needs to meet with the regulator’s guidance: the FCA’s rules on financial promotions are prescriptive and need to be followed.
Making sure that financial promotions follow the TCF guidelines is important. So is ensuring they measure up to the FCA’s requirement that promotions are ‘fair, clear and not misleading’. A close relationship between the Compliance and Marketing teams can help here (and you can read more tips on how to achieve this in our blog, Marketing and Compliance – Chalk and Cheese, here).
Your brand’s identity is core to its perception and its success. Brand experts tend to agree that identity is more inward-looking than the other brand components. It is focused on how the company sees itself and how its employees identify with its vision and values. As such, identity becomes the responsibility of everyone in the firm. Do people behave in a way that enhances and supports the brand’s mission and values? Do leaders ‘walk the walk’ rather than paying lip-service to corporate behaviours?
Here again, Compliance is central. A firm where a compliant approach is embedded into the corporate culture, rather than being a box-ticking exercise at the end of a project, is one that will have a strong and positive identity. (Our blog on How to embed a compliance culture within your business has some good tips on this: you can read it here.)
The corporate brand can be crucial to the success or failure of the business itself. Your brand is at the heart of your firm’s strategy as well as its public perception. And the Compliance team is crucial to how well the brand’s values are embedded within the firm, as well as to whether it is promoted in a way that meets regulatory standards. The importance of compliance to your corporate brand strategy should not be underestimated.