The compliance landscape crosses borders and jurisdictions, because financial crime is transnational. As we move forward and become smarter and more sophisticated, so do threat actors. Not too long ago, artificial intelligence was just a subject discussed in Hollywood movies, but as a civilization we are using it for a variety of purposes, including financial crime. That is why now more than ever, as compliance professionals, we need to lean on each other; work with each other; and educate each other so that we all get better at what we do because criminals are getting better at what they do.
Compliance has emerged from being a tick boxed exercise to really a discussion around whether the underlying risk is addressed. Risk management really came to the forefront with Sarbanes Oxley, but financial crime risk, was and is, a whole different ball of wax. I remember when I first started in this field over a decade ago, and financial institutions rarely had more than a handful of people working within financial crime. It wasn’t a thing. It wasn’t until the US regulator started taking a long hard look at financial institutions, that they discovered a lot of the relationships and activities that they were undertaking weren’t on the up and up. They then started noticing risks related to other non bank financial institutions types, and the vector they played by allowing access for the illicit flow of funds into the financial systems. As time marched on, the list of reporting entities grew and the legislation changed and developed.
Often when you are advising either externally or internally at a reporting entity, there are so many competing interests. More often two factors can play heavily into whether a risk is addressed or not, and it can boil down to money, ego and collaboration. Money is a huge reason, I see how the people that make the money try to override decisions, pull rank and often make attempts to sideline compliance decisions. There is also a lack of hiring enough compliance people to really have an effective compliance framework. This leaves compliance folks often scrambling and making decisions sometimes where the full pictures is not provided, or on the fly with other competing interests. Ego is another aspect, it is hubris. I have encountered in my past where decisions are made on the “because I said so” model. Where often the decision being made was by a person who was not qualified to do so, or was outright wrong. Often this can shuts down innovation, can result in talented staff leaving, and can put an entity at risk. With all that being said, compliance folks are not blameless. Compliance can be seen as “yes”/”no” team members, without explanations as to why something can’t be done. There are some hard “no’s” when it comes to the compliance profession, but often some questions play in a grey area. It is in the grey area that the intelligence, resourcefulness and the “ability to play well with others” are key qualities that a compliance officer should have.
Why Compliance Circle?
Compliance Circle is a place I hope to engage and collaborate with like minded individuals. I don’t have all the answers, one shouldn’t be expected to, but what I am looking for are people I can lean on, and who can lean on me…and maybe do some interesting work together.
