For compliance officers, the last 10 years have been a time of unprecedented change due to challenges presented by the sheer volume of regulatory requirements. Respondents were asked to identify their greatest compliance challenges for 2019. The top 4 are:
- Volume and pace of regulatory change
- Increasing regulatory burden
- Financial crime, AML, sanctions
- Culture & conduct risk
The greatest change that has taken place over the last ten years is with technology. The successful deployment and the ability to automate future compliance activities is seen as one of the greatest potential innovations for the last 10 years. Is your compliance team using the most efficient technology and processes? While there are many challenges and difficulties with new technologies, the benefit is focused on processes with the potential to automate with increased accuracy and speed. The adoption of technological solutions and automation being approached cautiously to ensure that the promised benefits are deliverable.
To realize the benefits of new technology firms must be willing to make significant investments to upgrade their IT infrastructure. Technology will play a vital role in the personal liability and accountability of senior managers. They will be held responsible for the misuse or failure of any and all technology.
Regulatory change remains the single biggest challenge for compliance officers in the coming years. For 2019, the increasing regulatory burden, financial crime, AML and sanctions compliance, together with culture & conduct risk and the adequacy and availability of skilled resources, were all raised as challenges. In contrast, for 2018, data privacy and the General Data Protection Regulation together with enhanced monitoring and reporting requirements were highlighted, in addition to continuing regulatory change.
Compliance budgets are expected to rise. Each year budgets continue to have a slight increase and this will remain for 2019. 63% of firms expect to have more available budget compared to 61% in 2018. Meanwhile, 65% of respondents report an expectation that the cost of senior compliance staff will rise in 2019.
Growth in compliance teams is expected to slow down. The majority of respondents, specifically 58%, expect the size of their compliance teams to stay the same. For this reason, reason leveraging technology to streamline compliance processes would be beneficial for compliance teams to optimize their time and productivity.