The payments and financial services landscapes remain in flux, and that continues to create opportunities for bad actors.
With regulatory and cyber risk landscapes becoming increasingly complex, while at the same time financial crime tactics are growing more sophisticated, organizations cannot afford to remain reactive. The challenge, however, lies in convincing the C-suite that compliance is not merely a cost center or a bureaucratic necessity, but a critical enabler of growth, efficiency and competitive advantage.
At the center of the dilemma is the reality that risk and compliance functions are often perceived as necessary evils — departments that slow innovation in the name of control.
The key theme that CFOs, CISOs and other finance and IT chiefs are starting to share with their peers? The simple fact that by positioning compliance as a competitive differentiator, rather than a constraint, executives can better align risk management with business objectives.
After all, traditional compliance programs are often rigid, focused on the traditional three-step mantra of “prevent, detect and respond” and relying on predefined rules that struggle to keep pace with evolving threats. This reactive stance often places companies in a defensive position rather than fostering innovation and resilience.
Read more: Digital Evolution of Finance Function Sees CFOs Embracing Cyber Duty
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Strategies for Selling the C-Suite on Modern Compliance
Moving beyond business survival to thrive in today’s operating environment can require a shift that moves beyond conventional safeguards to embed modern risk management into the business fabric.
Executives respond to numbers, and compliance teams must be able to translate regulatory and operational risk into tangible business metrics, rather than as pure-play legal obligations.
Modern risk management tools leverage innovations like artificial intelligence (AI), machine learning (ML) and advanced analytics to streamline compliance processes. Automated reporting, predictive risk modeling and digital identity verification can help to reduce manual workloads and improve accuracy, allowing teams to focus on strategic initiatives rather than administrative tasks.
According to the PYMNTS Intelligence report “Cybersecurity Risks Cause Middle-Market CFOs to Cancel Innovation Plans,” 44% of middle-market firms have invested in cybersecurity defenses. This means that more than half have not.
The PYMNTS Intelligence data revealed that 13% of high-uncertainty businesses had implemented multifactor authentication across systems versus nearly a third of low- and middle-uncertainty operations. The often-costly move of hiring third-party cybersecurity firms was not popular with any demographic, with only around 15% of all firms doing so.
See also: Compliance Moved From Cost Center to Growth Engine in 2024
Fostering a Culture of Compliance Across Departments
Risk and compliance should not operate in silos. Instead, they can be woven into the fabric of an organization’s culture. This requires engaging stakeholders across departments — from product development to marketing — to ensure that compliance considerations are embedded in decision-making processes.
For example, integrating compliance into the early stages of product design ensures that security and regulatory requirements are met before launch, reducing costly retroactive fixes. By making compliance a shared responsibility, organizations create a more resilient and adaptive risk management framework.
“Fraud is growing as fast, or faster, than the pace that the overall B2B market is growing,” Eric Frankovic, general manager of business payments at WEX, told PYMNTS.
As PYMNTS has reported, regulators are increasingly turning their attention to the downstream risks associated with know your business (KYB) compliance and risk management.
“In the past year, I think we’ve seen a huge amount of increased scrutiny around fin crime from regulators,” Will Artingstall, head of digital asset payments and eCommerce services at Citi Services, told PYMNTS. “There’s been several regulatory actions that are targeting mitigating activities like KYC [know your customer] and AML [anti-money laundering] practices within financial companies.”
Echoing that sentiment, Jon Gaskell, SVP of strategic partnerships at Ingo Payments, told PYMNTS, “To be a FinTech now is to be faced with a tremendous amount of scrutiny … Security has to ‘top’ growth.”
Instead of leading with regulatory jargon, back-office leaders can work to articulate how proactive compliance enhances competitive positioning, enables faster market entry, and reduces operational bottlenecks.
Fortunately, the marketplace is responding. On Monday (March 3) software supply chain security firm Cloudsmith announced it raised $23 million in new funding, while PYMNTS covered this past summer how cyber insurance premiums are declining around the globe.
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