AustralianSuper’s enhancements to its operational processes have enabled quicker responses to regulatory change, and a better understanding of the likely impacts, delegates at the Investment Operations Conference heard.
As part of its process risk and control documentation, the country’s largest super fund has identified and mapped where the controls exist in its processes, incorporating regulatory compliance into the routine control effectiveness confirmation.
“So that way we can demonstrate not just we are meeting [compliance obligations], but how we are meeting them. Our compliance plans then become a seamless part of our operational risk management environment,” Anne Jackson, senior manager of the risk effectiveness program at AustralianSuper, said.
“Confirming compliance by confirming control effectiveness now becomes part of our routine business process, rather than having questionnaires going out to business leaders once or twice a year.”
She added that the benefits of integrating the compliance process into the operational risk documentation, particularly in the process space, is that the super fund can understand the implications for regulatory obligations where process change is contemplated.
“We can understand also what we need to think about when we are looking at new business areas. We can understand the impact on our business process where regulatory change is proposed and react more quickly,” Jackson said.
“And we can look at how we can improve compliance consistency across different parts of the business.”
She added the super fund was also now much more effective in knowing how much to “bottle down” the control environment, because they had a clearer understanding of the business processes.
“We can also then understand when something goes wrong, we can backtrack and work out the source and where we need to focus on our controls.”
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Compliance teams not from Mars
The theme of integration and better understanding also applies to personal relationships.
“It’s about good relationships. The compliance team aren’t from Mars; they are people who just sit at the other end of the floor,” Jackson said.
“In the investment department we have a very well-resourced, capable first line [defence] risk team that provides that support to the business, so they do provide a way of interfacing between the group compliance function and the business leaders. They are able to provide that context and content to help the business understand what it has to do from a compliance perspective.”