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The Future of compliance?

Friday 29 July 2022


What does the future of the compliance professional look like?

This one of the questions posed by the Thomson Reuters 13th Cost of Compliance Survey 2022
The report launched in July found five critical challenges for compliance practitioners:

  • The volume  and implementation of regulatory change
  • A lack of budget and resources
  • The availability  of skilled resources
  • The need for  effective  compliance monitoring; and
  • cyber resilience
The report found that respondents saw the future being driven by data and technology:

Financial services firms and their compliance functions are moving to a more automated environment and embracing digital transformation.

The report asserts that this means Regtech might be coming in to its own.

In Australia, the Regtech Liaison Meetings  hosted by the Australian Securities and Investments Commission (ASIC) have gone along way to connecting the regulatory technology solutions and the Australian financial sector. It has also driven the regulators own forays into supervisory technology looking at natural  language processing (NLP).

In line with the first of the five critical challenges for compliance practitioner, the volume and implementation of regulatory change, the latest Internal Dispute data requirements from the conduct regulator has raised some questions of wither compliance functions specialising and becoming subject matter experts in the technology space as well as the need to break the  walls of information silos within organisations.

GRC Institute Strategic and Engagement Consultant Carole Ferguson told
GRC Professional Podcast that she saw entities meeting the new data requirements as a major challenge.   
“But when you add this to all the other things that you got to do , our members, all I can say is take the time to communicate strongly with your boards, so they understand what the requirements are form ASIC and they understand that this actually is a new generation of regulation, and it is actually going to make the compliance role more difficult.”

Ferguson continued that she saw solution as about building relationships, “It’s a hard one because it’s not clearly skillset that your average compliance person has, and so I think it’s about building relationships.”

Some Other  Highlights
The report also identified that the ‘single biggest or conduct risk’ that firms are facing is balancing competitive  and compliance pressures.

The report found for the respondents who thought that the cost of senior compliance staff would rise almost half of those said that it was driven by demand for senior compliance officers.

When it comes questions of specific skills that the organisations were looking for from their compliance professionals is subject matter expertise,  attention detail and communication skills:

Perhaps the most obvious change is the increasing need for technology understanding, which fits with the acceleration of digital transformation seen during the pandemic.

However, despite the increased demand for senior compliance professionals and the specific skillsets budgets for compliance teams are expected to remain the same.

On the question of accountability,  the report highlights that the senior management accountability campaigns actually will or have already,  capture compliance professionals.

This places another reason why financial services, and compliance, is in danger of becoming an unpopular career choice for junior employees and as a consequence remuneration and other costs increase.