I aim to write a weekly blog on day to day, some ordinary and some more complex challenges of being a compliance officer. Having been in a control function role for the last 7 years of my career and prior to that, being in commercial and corporate banking roles has created quite a unique prospective to my professional standing.
I am going to use this platform to share some of my past experiences, strength and challenges that I either have found a solution to or that it is still work in progress. Hopefully, with the contribution of the readers, we can all collectively engage in meaningful conversations to help one another to be more effective at our roles.
How things have changed
Compliance had a different name tag to it before Fintech and Regtech were born in the financial sector. I came to financial services and banking when there were still pass books around that a customer would get the record of their transactions and account activities printed in a branch of a bank. The financial environment has significantly changed these days with mobile apps and digital wallets. Our ordinary day to day financial behaviour have significantly changed. Therefore the role of a compliance officer, which is meant to effectively analyse those patterns of behaviours needed change.
Is the bare minimum good enough?
In this week’s blog I aim to concentrate on one specific topic: ‘ senior management asking: what is the minimum we can get away with’. With no intention of questioning integrity of any board of directors I have ever worked with before, I have learnt over the years that there is a gap between what a regulator, who really represent a government’s appetite to risk and consequences of non-compliance, compare to what actual businesses are encouraged to do when it comes to regulatory change and being compliant.
Even a junior compliance analyst soon begin to understand that the competent authorities aim to give guidelines only and leave the grey areas to be dealt with inside the firms. Hence the challenges of a compliance officer on a regular basis. In the UK we had Criminal Finance Act coming to force October 2017. The HMRC is now able to prosecute any business who directly or through their associations, i.e. employees, senior management, facilitate Tax Evasion. I will write a separate blog in time about this piece of legislation, but my main point to communicate here is that how can a compliance officer really sell the benefits of such legislations to a small to medium size business for the senior management to actually be encouraged to comply.
Having gone through a start up personally in 2012, I have a first hand experience of many decisions a small firm need to make to stay afloat, one being the wise spending of time and resources on stuff that simply do not add value to the growth of the company, or at least that is how it is perceived. Complying with regulations among your average senior management tend to mean business prevention and waste of time and money. I say ‘average’ because I strongly believe short term commercial success has become the trend of business owners who are in the game for a maximum of 5 years and they primarily focus to grow the business to a certain size to then be able to sell off and move on. Long term commercial success require a different approach to growing a business and welcoming the regulatory boundaries of the industry the business belong to. Again I will cover this topic on another blog another time.
Conclusion
I am going to conclude on this point that in order to be successful and effective as a compliance officer, in this day and age considering all the challenges discussed above, he/ she would need to develop sets of skills to encourage businesses to be compliant. The appetite may not be there and that cannot become an off putting point. In another word, a compliance officer should make it their responsibility and job to bring in and enhance a culture of compliance which ultimately is a happy marriage between integrity and success.