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Why the Financial Services Industry Can't Waste Hours on Compliance Stop-Gaps

$8 Million Reasons to Rethink Your Product Governance Strategy

In a recent decision that has sent shockwaves through Australia's financial services industry, ASIC secured another $8 million penalty involving the Design and Distribution Obligations (DDO).

Following a previous $8 million order in July 2024, this watershed moment delivers a crystal-clear message: financial institutions can no longer afford to treat product governance as a checkbox exercise—nor can they continue losing thousands of valuable hours on ineffective compliance stop-gaps.

The Real Cost Beyond the Penalties

The recent court decision highlighted several alarming practices that led to substantial penalties:

• Inadequate product governance frameworks for ensuring distribution aligned with Target Market Determinations (TMDs)
• Cross-selling strategies that failed to consider product suitability for existing customers
• "Objectively reckless" conduct in product distribution
• Insufficient steps to meet statutory obligations under DDO legislation
  
  

But the true cost goes far beyond the $8 million penalty.

Consider this: How many thousands of hours is your organisation currently wasting on manual compliance processes that still leave you vulnerable?

The Hidden Productivity Drain Most Institutions Won't Acknowledge

While the recent penalty has captured headlines, forward-thinking organisations are confronting an uncomfortable truth: their current approach to compliance isn't just risky—it's massively inefficient.

Most organisations still rely on:

• Manual processes requiring hundreds and hundreds or thousands of staff hours annually
• Disconnected spreadsheets creating information silos
• Fragmented systems providing incomplete visibility
• Reactive approaches that address problems after they occur

This approach doesn't just risk regulatory penalties—it represents a staggering opportunity cost in terms of lost productivity, innovation, and competitive advantage.

Skyjed: Reclaiming Thousands of Hours While Strengthening Compliance

This is where Skyjed's AI-powered platform is transforming how organisations approach governance and compliance, delivering measurable results that speak for themselves:

• At least 50% reduction in time spent on monitoring - whether this is your products, communications, processes or controls—imagine what your team could accomplish with thousands of hours returned to them
  
  
• Streamlined automated processes that enhance active oversight while eliminating tedious manual tasks
  
  
• Real-time reporting and automated review triggers that catch issues before they become problems
  
  
• Comprehensive audit trails that transform regulatory demonstrations from weeks of preparation to minutes of reporting
  
  
• Enhanced collaboration that breaks down silos between compliance, product, and business teams
  
  

Real ROI That Makes Compliance a Strategic Advantage

Our clients consistently report achieving ROI within the first year of implementation through:

1. Hours Reclaimed

o    Automated monitoring replaces manual checks
o    Self-service reporting eliminates custom report creation
o    Proactive alerts reduce crisis management time

2. Dramatically Reduced Risk Exposure 

o    Real-time compliance visibility across product and other lifecycle managed portfolios
o    Early detection of potential issues before they escalate
o    Continuous alignment with regulatory expectations

3. Enhanced Strategic Decision-Making

o    Data-driven insights that transform compliance from a cost centre to a value driver
o    Clear visibility into product performance against compliance metrics
o    Strategic lifecycle decision support that improves both compliance and profitability

The Choice Is Clear: Innovate or Face the Consequences

As regulatory scrutiny intensifies, financial institutions face a stark choice: continue investing hours in manual processes, or embrace technology that simultaneously strengthens compliance and liberates resources for growth and innovation.
The recent $8 million ASIC penalty demonstrates that regulators are serious about ensuring financial products truly serve consumer interests.

The question isn't whether you can afford to invest in modern product governance—it's whether you can afford not to.

Let Us Help You and Your Customers (And Your Bottom Line)

Leading organisations are partnering with Skyjed to:

• Replace thousands of hours of manual compliance work with automated intelligence
• Transform reactive firefighting into proactive risk management
• Convert compliance data into strategic insights that drive better business decisions
• Protect both customers and shareholder value through superior product governance

Organisations that continue with manual, fragmented approaches to compliance aren't just risking penalties—they're guaranteeing themselves a competitive disadvantage.

With Skyjed as your technology partner, you can transform product governance from a compliance burden consuming hundreds or thousands of hours into a strategic asset that simultaneously drives better customer outcomes, reduces operational risk, and frees your team to focus on innovation rather than administration.

Contact the Skyjed team today to discover how Skyjed can help your organisation achieve compliance excellence while driving operational efficiency that delivers measurable ROI within 12 months.

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