compliance plays meeting

Compliance Plays for 2019

It is mid-year and certification time is over. As we all look to the promise of nicer weather, it’s an appropriate time to assess the current state of your compliance programs. Between rapid technology changes and new demands from regulators, CCOs must have a program that allows them to respond to new requirements. However, CCOs often wear many different hats in a firm and may also be burdened with labor-intensive processes. At ComplySci, we understand the challenges of keeping track of regulatory changes while also running a compliance program.  As a result, we have released our annual CCO Playbook for 2019.  Let’s take a quick look of what’s inside.

Quick 2018 Replay

It is important to reflect on the past year to understand what moves by regulators could affect the year ahead. In 2018, we saw not only the first effects of the General Data Protection Regulation (GDPR) (echoes of which can be seen in the soon-to-be-implemented California Consumer Privacy Act) but also saw the SEC and FINRA placing stakes in the ground around data and technology.  Released in the fall of 2018, the SEC’s four-year plan stated specifically that they would be investing more heavily in data and technology to improve performance and expand oversight and enforcement.

2019 – The Year of Tech

At ComplySci, one of the biggest challenges compliance professionals tell us they face is being able to identify, implement and leverage the right tools to help mitigate risks and increase the compliance department’s effectiveness. As regulators begin to use technology in their own enforcement, there is little debate that firms also need a compliance technology solution.

Specifically in 2019, the SEC is leveraging technology to enhance its capabilities of the Office of Compliance Inspections and Examinations (OCIE) to investigate how firms handle cryptocurrency. In FINRA’s 2019 examination priorities, it stated that there would be a focus on RegTech. FINRA is very focused on how member firms use regulatory technology and will enhance its own use of RegTech, stating, “We will continue to enhance our market surveillance to incorporate new data and address new market practices.”

While regulators continue to expect CCOs to leverage technology to manage their compliance programs, we also see next generation technology such as Artificial Intelligence (AI) beginning to take hold. According to Thompson Reuter’s Regulatory Intelligence report for 2019, CCOs are trying to understand how best to use AI to fight cybercrimes – something that is becoming a growing concern for firms of all sizes.

What does 2020 look like?

We predict that CCOs and the Compliance function will have a more dynamic role in helping the business identify risk in real-time. In order to do this, CCOs will need to rely even more so on technology solutions that can bring them more data and transparency to identify risk. Creating a plan for the balance of 2019, and into 2020, can help ensure that you are not surprised by changing compliance and technology dynamics.

Want to learn more on best practices for your compliance program? Download the full 2019 CCO Playbook here.