Thomson Reuters GRC surveyed more than 500 compliancepractitioners rom nancial services rms around the world betweenNovember 2011 and January 2012 to canvass their views on the costso compliance and their greatest challenges or the year ahead. Theresults refect the continued ocus on regulation and compliance inthe atermath o the global nancial crisis and the ever-increasingcomplexity and volume o requirements. Similar research wasundertaken in prior years and comparable results are included whereapplicable.The responses received covered Europe, the Americas, Australasia, Asia,Arica and the Middle East. They represented rms rom across thenancial services sector, including banks, insurers and und managers.Feedback came rom nancial services rms o all sizes, ranging romthose whose compliance departments comprised just one person toglobal conglomerates with much greater resources.It is clear rom both the number o respondents and the rankness o thedetailed comments received that compliance ocers rom all regulatedrms are, more than ever, under severe pressure. It is evident rom theresponses that many compliance ocers have now reached saturationpoint.Firms’ executive management and regulators alike need to understandand address the increasing strain on compliance. A vital actor in easingthe pressure on the compliance unction is the provision o adequateskilled resources to meet the growing demands and challenges. Theoten under-valued task o compliance can be made substantiallyeasier where senior managers visibly and vocally demonstratesupport or the compliance unction and promote a compliant culture.Similarly regulators around the world must start to take account o therelentless pressure on compliance unctions to assimilate and drive theimplementation o the ever-increasing burden o regulatory change, ithat change is to be eective.
“A Chie Compliance Ocer whodoes not have the ull support andengagement o senior managementand the board is not going to beeective.”
Carlo V. di Florio, Director, Ofce o Compliance Inspections andExaminations, U.S. Securities and Exchange Commission, January 2012.
The majority o the respondents had ewer than ve people in theirteam to manage the ever-growing compliance obligations or theirorganisation. The survey asked about the proportion o time spent onkey compliance activities and the chart above provides a snapshot othe average compliance week based on the most popular responses.While this illustration covers core activities, it is only a proportion ocompliance obligations. When other crucial value-added roles andactivities are also actored into the working week – activities such asdealing with queries rom the business, undertaking investigations orpast business reviews, and managing regulatory visits and relationships– it is clear why compliance teams are so stretched. On average, halo the typical compliance ocer’s working week is taken up with thebare non-optional basics. This result again leads to the conclusion thatmany compliance ocers are reaching breaking point.
Typical week o a compliance ocer
TRACKING, ANALYSING AND INFLUENCING REGULATORY CHANGE
Tracking potential and actual change is essential to ensure that the rmis aware o and prepared to meet regulatory requirements. Complianceocers around the world are under no illusions that 2012 will bringeven more regulatory inormation rom both regulators and exchanges.Almost hal o respondents thought that the level o regulatoryinormation would be signicantly higher over the next year.Overall, 84 percent o compliance ocers surveyed believed the fow oregulatory inormation would increase in 2012. These expectations havesteadily risen over the past ew years and are supported by nearly a 16percent increase in the number o regulatory alerts tracked by ThomsonReuters GRC year on year.
Over the next 12 months, I expect the amount o regulatoryinormation published by regulators and exchanges to be:
SIGNIFICANTLY LESS THAN TODAYSLIGHTLY LESS THAN TODAYTHE SAME AS TODAY
SLIGHTLY MORE THAN TODAYSIGNIFICANTLY MORETHAN TODAY
COST OF COMPLIANCESURVEY 2012
TRACKING AND ANALYSINGREGULATORY DEVELOPMENTSBOARD REPORTINGAMENDING POLICIESAND PROCEDURESLIAISON WITH CONTROLFUNCTIONSOTHER COMPLIANCE TASKS INCLUDING:COMPLIANCE RISK ASSESSMENTREGULATORY LIAISON AND EXAMINATIONMONITORING AND TESTINGINVESTIGATIONSTRAININGPROVIDING ADVICE TO THE BUSINESSRESPONDING TO PROPOSED LEGISLATIONREGULATORY REPORTING