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5 key traits of effective compliance professionals in 2019

25 / 06 / 2019

Earlier this year, we published our latest Compliance and Financial Crime Market Report. The clear theme that arose from our comprehensive employer and candidate surveys and independent research is that compliance is currently undergoing a time of transition.

Strong governance remains essential and expectations on the function are rising, yet cost pressures are beginning to mount. Many departments are in the unenviable position of needing to constantly evolve and innovate while facing budget cuts.

Our figures show 67% of compliance hiring managers expect to recruit this year, down from 79% in 2018. Salaries are also increasing, which means poor hiring decisions are more expensive than ever before.

Amid a challenging regulatory and economic backdrop, what key skills are employers looking for in the best compliance officers as we head towards the midway point of 2019?

1. Boardroom sway 

A recent Accenture Compliance Risk Study showed 71% of financial institutions are reducing compliance budgets, with nearly two-thirds (64%) targeting cuts of between 10% and 20% over the next three years. Yet, a Duff & Phelps study showed compliance costs will double between 2017 and 2022, rising from 4% of revenues to 10% over the five-year period.

 


Chief Compliance Officers (CCOs) and other senior compliance professionals must therefore have sufficient stature within the business to effectively communicate the function's continued importance to the C-suite. A fundamental part of this will be the ability to negotiate for essential resources to not only assist with regulation compliance but also wider business growth.

Interpersonal skills are becoming increasingly importance as the compliance role takes on this more strategic focus. However, 15% of compliance departments told us that finding candidates with these 'soft' skills was their primary recruitment challenge last year.

 

2. An innovative spark

Traditionally, compliance teams have been firmly situated within the second line of defence, where they are only engaged once issues have already arisen. But operating models are evolving rapidly, and compliance professionals must have a more forward-thinking approach to identify and implement the right controls and metrics to protect their organisation as the risk landscape broadens.

McKinsey proposed the idea of Compliance 2.0 in 2015, whereby compliance teams should move beyond offering advice on statutory obligations towards being active co-owners of risk. According to Accenture, these changes are now underway in many businesses, with 60% of financial institutions claiming responsibilities that were traditionally handled by compliance have now shifted to the first line of defence.

These tasks include KYC, testing and surveillance, freeing up compliance to examine emerging risks and focus on business growth. As compliance roles are modernised and redefined, professionals require the flexibility and commercial acumen to adapt accordingly.

3. Digital prowess

Technology is transforming many areas of governance, and compliance is no exception. Artificial intelligence, robotic process automation and RegTech are helping leading financial institutions to identify risks early, automate controls and reduce the manual labour burden for professionals.

Leveraging the full potential of these platforms requires compliance professionals who are proactive, digitally fluent and abreast of the latest technology developments. This is not merely to build the necessary control frameworks to handle a more technology-driven business approach, but also to take advantage of innovations to improve the efficiency, speed and effectiveness of the compliance department itself.

More than three-quarters (76%) of respondents to Accenture's 2018 Compliance Risk Study believe there is a significant gap between the skills currently available and those required when it comes to effectively deploying and using compliance tools. Our own research echoes these concerns, with 59% of employers saying that finding compliance professionals with the right technical skills was their biggest recruitment hurdle last year.

4. An integration over isolation mindset

The compliance function of the future will likely continue to be more integrated, both within its own teams and across other lines of defence.

We've already discussed how 60% of firms have shifted compliance duties to the first line - operational management. However, our own research also shows employers are increasingly open to hiring beyond traditional talent pools to access a broader range of skills within compliance. For example, 67% of hiring managers said they would consider recruiting audit professionals for compliance monitoring roles.

Furthermore, the Accenture report claimed as much as 13% of a compliance officer's time is currently spent liaising with other control functions. As compliance evolves, employers will be looking for professionals who can eliminate any friction between teams and the business in an effort to deliver a more integrated, transformative and holistic approach to risk.

5. Untapped potential 

Employer expectations are admittedly at an all-time high, with compliance hiring managers demanding strong academic performance and solid technical and interpersonal skills.

But organisations are also becoming wary of candidates who have 'jumpy' CVs and seem to lack a consistent employment history. Professionals seem to be taking note, as just 23% of those in compliance roles switched jobs in 2018, down from 28% the previous year, according to our figures.

This creates further talent shortages in a market where key skills are already in high demand, particularly as 62% of employers believe candidate salary expectations are already making recruitment difficult. As such, we may begin to see more organisations commit to training and upskilling employees to meet the growing demands of the function.

 



Existing staff will no doubt benefit from this approach, but companies may also begin to consider new hires who don't quite tick all the boxes but have obvious potential. A natural aptitude for data, analytics tools and other disruptive technologies is likely to be considered a huge plus for employers that are keen to transform compliance into a more advisory-led function.

Building a compliance function for the future

Compliance departments are undergoing a period of unprecedented change. In order to smooth the transition to a better integrated, more growth-oriented function, organisations require innovative compliance professionals with a well-balanced mix of technical and interpersonal skills.

However, with 35% of employers admitting that finding the right talent was more difficult than expected last year, teams face considerable challenges when trying to achieve ambitious compliance goals. This is where the right partner who has a deep understanding of the market can help alleviate some of the recruitment burden.

If you would like to discuss your compliance hiring needs or are looking to take the next step in your career, please contact me on 020 7936 2601 or via email at NE@barclaysimpson.com.

Our 2019 Market Report combines our review of the prevailing conditions in the compliance recruitment market with the results of our latest employer and candidate surveys.

Image credits: Dan Schiumarini (main) and Tim Gouw (inline) via Unsplash

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