Compliance professionals working in the financial services industry often wear multiple hats, handling compliance responsibilities in addition to managing or participating in other areas of their firms. When it comes to the compliance part of the job, there are some common themes that seem to be applicable in firms of any size, in any geography.
Whether your title is “Compliance Officer,” “Compliance Manager,” “Risk Officer,” or something else, if you are responsible for managing your company’s risk and ensuring compliance with applicable regulatory rules and regimes, your typical day should include the following tasks and best practices:
- Touching base with department heads. An effective Compliance Officer has a solid understanding of nearly every facet of their firm, from detailed knowledge of the firm’s products and services to the inner workings of the behind-the-scenes operational tasks that keep the firm going. Compliance Officers also need to know the nuances of the company’s sales and distribution structure, marketing processes, accounting function, and IT framework. Of course, it is not realistic to think that a Compliance Officer connects with every one of these business areas each and every day. However, keeping tabs on other departments and staying abreast of proposed changes can significantly lower the firm’s risk.
- Staying on top of applicable laws and regulatory regimes. Compliance Officers must make concerted efforts to know which regulations apply to the firm’s business, understand the “why” behind each rule, and regularly monitor industry news for changes or new interpretations in those rules. For some, this means devoting a portion of the day to seeking out and reading the latest industry news.
- Monitor firm policies and procedures. The most basic tenet for regulatory compliance departments is that the firm needs policies and procedures that are reasonably designed to achieve compliance with all applicable laws and rules, so that the firm can effectively prevent, detect, and correct violations. Compliance Officers must ensure employees receive necessary compliance training, remain vigilant, and test policies regularly in order to identify – and take – necessary remedial action.
- Check in with supervisors regularly. In some firms, a significant part of the Compliance Officer’s day is spent connecting with front-line compliance, risk, and supervisory personnel, answering questions, overseeing their activities, and addressing potential issues promptly. Good Compliance Officers are able to communicate effectively with people at all levels of the firm, creating and nurturing a culture of compliance with every interaction.
- Keep senior leaders and directors informed. In addition to communicating regularly with other business lines and with employees, Compliance Officers must also keep their firms’ senior leaders and boards of directors informed of any issue that could be material. Effective Compliance Officers view their relationship with senior leadership as just that: A business relationship that is built on open and honest communication.
- Ensure the compliance function has appropriate systems and resources. Compliance Officers should also be involved in business and technology planning for the company, advocating for technology and resources designed to achieve compliance. Firms that manage risk most effectively have learned to leverage the power of automation and RegTech solutions to lower risk and avoid regulatory scrutiny.
Naturally, the ebb and flow of the business dictates the actual day-to-day responsibilities of a Compliance Officer. However, these general themes apply to most Compliance Officers in their everyday work responsibilities.
In firms that have adopted compliance technology solutions, Compliance Officers do not need to worry about manually reviewing lists of data or spreadsheets to identify risks. Instead, they can focus their time and energies on the high-level responsibilities identified above, safe in the knowledge that their compliance platform is doing the labor-intensive work for them. In these firms, real-time reports are just a few clicks away at any time, making it simple and easy to report to senior leaders or to prepare for an audit. That’s not to say that all risk is eliminated, but RegTech solutions do alleviate most of that burden.