November 13, 2006 08:00 ET

QUMAS: Compliance Risk Equates to Brand Risk -- Savvy Financial Services Firms are Incorporating Compliance Risk Into Mainstream Risk Management

White Paper Details Why Compliance Should Be a True Risk Management Function and How to Go About Becoming One

FLORHAM PARK, NJ -- (MARKET WIRE) -- November 13, 2006 -- QUMAS, the leading developer of enterprise governance, risk and compliance solutions, today unveiled the first in its "The Compliance Department Comes of Age" series of white papers. Authored by former regulator Kevin Ludwick, head of regulatory services for QUMAS, the paper, "Risk and Reward: Why Compliance Should be a True Risk Management Function," is now available for download:

"Compliance risk equates to reputation risk so it's imperative that the Chief Compliance Officer joins risk management colleagues in helping management set, review, and document compliance risk appetite in meaningful, actionable terms," states Ludwick. "While compliance departments have been around for decades, compliance risk is only now emerging as a discipline. Those firms that elevate it to the level of other risk disciplines can benefit from more informed decisions and enjoy a competitive advantage.

"In fact, regulators are now requiring firms to take a risk-based approach in their compliance programs. This paper empowers the compliance function by detailing how firms can get there, while shunning the perception of compliance as a slow, costly and inaccurate process," continued Ludwick.

"Risk and Reward" examines why compliance should be a true risk management function and how to go about becoming one. It identifies three key challenges and one critical opportunity:

--  Compliance needs to agree with senior management a framework for
    defining the reputational risks that the compliance function is then
    charged with mitigating; Compliance work needs to be organized into
    discrete activities that can be directed to mitigate risk and then aligned
    with appropriate technology platforms.
--  The compliance framework must meet the needs of complex organizations
    by delivering information and "views" by group, legal entity, product,
    country and other roles within the organization.
--  Compliance has a great opportunity to use this platform to absorb the
    reporting of other more established risk management functions to show
    management a complete and real time picture of regulatory risks.
Upcoming Topics

Over the next several months, QUMAS will release additional white papers in the series. Topics Ludwick will cover include:

--  "Setting Risk Appetite" -- how to present information to management
    that identifies key risks and provokes acceptance or mitigation.
--  "Getting Started" -- how to create compliance processes that
    facilitate efficient efficiency, rigor and risk reporting across product,
    country and legal entities.
--  "Develop and Sell the Message" -- best practices for compliance
    management, in regards to workflow and information in regulatory
    consultation, rule interpretation, policy and procedure development and
    issuance and training.
--  "Was the Message Right -- Is Business Compliant?" -- best practices
    for compliance management workflows and information in control room,
    monitoring, investigation and corrective action.
--  "Making the Right Decisions" -- best practices for compliance
    management workflows and information in compliance advisory and management
--  "Making Life Easier for Everyone" -- an integrated approach to
--  "Linking it all Together" -- tying the compliance department's
    presentation of risk to that of the risk management functions to aid better
    management decision-making.
About Kevin Ludwick

Ludwick brings a wealth of experience to QUMAS, both as a regulator and as head of compliance responsible for designing and implementing compliance strategy. He joined the Financial Services Authority (FSA) in 1999, supervising all major European and Japanese financial institutions in London. Ludwick subsequently ran the Listing Review, and was responsible for negotiating relevant EU Directives and revising the UK Listing Rules in parallel with Sarbanes-Oxley in the U.S.

He also created a single supervisory function for the new Markets Division and built the FSA's centralized regulatory decisions function. Prior to joining the FSA, Kevin was the head of compliance for Bank of America EMEA, running a compliance function that operated across 11 jurisdictions, and was the former finance and compliance director for Indosuez Capital.


With over a decade of experience, QUMAS is the only global compliance software company offering a complete solution to regulated industries. Recognized as the world leader in Enterprise, Governance, Risk and Compliance the company has over 250 customer deployments including global leaders such as Fidelity Investments.

The QUMAS solution facilitates an informed, risk-based response to compliance challenges across your business. The QUMAS Compliance Framework channels and focuses resources, providing certainty to your state of compliance as well as meaningful reporting to stakeholders. The result is an optimized closed-loop compliance environment.

The QUMAS Compliance Suite™ provides an end-to-end compliance solution framework that enables organizations to achieve a continuous state of compliance. QUMAS delivers fully integrated Policy and Procedure definition together with business process enforcement, extensive monitoring and reporting facilities that help organizations improve their overall business performance.

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