MARCH 2022 NEWSLETTER
Compliance quote of the quarter
Tom Willoughby, Business Development Director, My Compliance Centre
30 March 2022
We love to keep our eyes and ears open for what others are saying about our industry. Here is our quote of the quarter:
‘'The trick is to drag compliance into the 21st century without compromising on regulatory requirements by leveraging regulatory focused data and organising information so that people understand it. The human factor cannot be ignored. Technology alone is not the panacea''.
RegTech Landscape – Fintech circle
This quote is still relevant today – even more so. Let’s start with the ‘21st century’ line.
Most obviously, compliance itself as a discipline is really a 21st century activity and to all intents and purposes has been invented and defined in this century. (I know, I know – some people were regulators with IMRO or other regulators or compliance officers before then, but really, Compliance as we know it now has grown up dramatically in the last 20 years. Compliance did exist in the last century, but not in the evolved and sophisticated way in which it is now practiced.) What has changed is the strategic focus given to compliance by boards of regulated firms and the skills of the compliance workforce in the modern era, honed to meet the requirements of current regulation and the complexities that surround it.
So, the fact that it is a 21st century discipline is much of the problem for me. Compliance has not had the same time to mature as other professions – think of the centuries of maturation time that the audit and legal professions have had, by way of comparison. And for much of compliance’s life, it has been on the back foot – defensive in the face of the regulatory onslaught and seen as an unwelcome cost centre by boards that have not wanted to invest in it like they do in other commercial functions.
So, I believe is that it is precisely because it is a 21st century discipline that it needs to still mature.
However, the sentiment FinTech Circle are making is not lost on me. If their point is that regulated firms need to automate their compliance functions, in the way they automate other commercial functions, then, of course, I do agree. The vast majority of compliance functions are still run, predominantly, on spreadsheets and e-mails, leading to massive inefficiency, an overuse of highly skilled staff’s expensive time on administration, and with the poor audit trails, awkward reporting processes and significant data inaccuracies that are a natural result of that method of working.
The truth is that the highly skilled compliance workforce of today needs better tools to deploy their skills, and, from that angle, encouraging compliance functions to come “into the 21st century” is a sentiment we can fully support.