What is the main purpose of a compliance program?

The primary purpose of a compliance program is to ensure adherence to laws and regulations governing financial activities. This involves creating a framework that helps organizations identify, understand, and comply with various legal requirements and industry standards that impact their operations.

A well-structured compliance program assists in mitigating risks associated with legal infractions, such as penalties, fines, and reputational damage. It also promotes a culture of integrity and accountability within the organization. By ensuring adherence to applicable laws, the program protects not just the organization, but also its employees and customers from potential legal hardships.

While attracting new customers, increasing profit margins, and managing customer relationships are important aspects of running a successful business, they are not the primary focus of a compliance program. A strong compliance framework ensures that business practices are conducted legally and ethically, which ultimately can support longer-term customer trust and a solid reputation, leading to better business outcomes. However, the core mission remains rooted in adherence to the relevant regulations and laws.