$185 million fine : Is this price sufficient for poor Sales Process Compliance and lack of Transparency in the world’s largest Bank ?

Frauds in big Corporate houses and Organizations have been making headlines since last decade and as you read this, world’s largest bank Wells Fargo has been charged $185 million fine for illegal sales practices that included opening of 2 million fake customer accounts. Following the allegations, the bank fired over 5,300 employees who engaged in this fraudulent behavior. Not only that, the harsh consequences included 10% decline in market cap in just a day. While the bank is finding ways to handle the current crisis and prevent future ones like this, Organizations worldwide are pondering upon the critical question : What is vital in a dynamic economy ? Is it just achieving the Sales targets or is it having efficient Governance and Compliance in place ?

So without  further ado lets discuss the 3 lessons we learn from the Wells Fargo fraud incident

1. Having the right tone at the top


The crisis is a result of a major systemic failure as the Senior management was clueless about the fraudulent behavior being conducted by the Sales team. To make the matters worse, the bank did not have proper Controls or any oversight responsibilities in place. While investigating the root cause of the crisis should be the immediate steps, Company’s response of settlement with regulatory agencies has only fueled the fire.

The lesson learnt here is that the tone-at-the-top is a deciding factor for a Company’s failure/success. The Board, the Senior Management and the C-suite have to bring in their expertise, not only in terms of setting the right business goals, but in terms of leveraging Emerging Technologies which offer the functionality of real-time Reporting, maintaining Transparency throughout the departments and being Agile in their approach towards addressing Risk and Compliance.

2. Agile systems needed instead of bulky systems

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While conventional Compliance tools have been satisfying their purpose since long, it’s high time to smell the coffee and embrace the Agile approach which has the robust functionality of addressing Risks in Real-time, robust Collaboration and dynamic Reporting. Companies worldwide have been spending millions on conventional systems which are bulky, complicated, siloed and opaque and ultimately making Compliance a “Check-the-box” activity instead of making it a Competitive edge.

Right before us is a real-world example which emphasizes the urgency to shift towards Agile tools as the International economy is changing every minute and the Business landscape is getting dynamic.

3. Incorporate Governance in business processes like Sales


Through decades, Business processes like ERM, Compliance and Audit have been prioritized for Governance and Sales has remained an island. The recent crisis at Wells Fargo has surfaced this subject as the fraud itself was the result of ineffective reaction to unrealistic Sales goals. Instead of falsifying customer accounts, the bank could well have been engaged in incorporating a Governance framework like Salesforce CRM to achieve the necessary speed and Agility.  It is now well established that in order to grow revenue one needs a robust CRM application.Today, over 100,000 of the world’s most innovative Companies—large, medium, and small—use Salesforce to close deals faster.

At Confident Governance, our mission is to Democratize Governance Worldwide leveraging the Emerging Technologies and our Robust Governance, Risk and Compliance Solutions built on Salesforce.com platform have been helping our Clients worldwide to automate their Business Processes thereby reducing time incurred, achieve Cost Efficiency, Collaborate effectively and instill Transparency.

Let’s continue the discussion on effective Compliance live. Join Serial Entrepreneur Bhavesh Bhagat and Industry Expert Jay Crossland on 22nd September @ 3 pm EST to get insights on the Agile compliance Strategies. Registration details can be found at http://bit.ly/webinar_22092016_register

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