“Senior Managers Regime ‘adds complexity’ to the Chief Compliance Officer’s role” states Deloitte

David Strachan: head of Deloitte’s EMEA Centre for Regulatory Strategy

David Strachan: head of Deloitte’s EMEA Centre for Regulatory Strategy

New rules on individual accountability are increasing the challenges put before chief compliance officers (CCOs), in turn adding to what is already a complex and evolving role. That’s the view of business advisory firm Deloitte, outlined in more detail within the company’s new report entitled ‘The Changing Role of Compliance’.

CCOs are having to come to terms with the new Senior Managers Regime and the Senior Insurance Managers Regime, effective as of Q1 2016, which will be adding to the already lengthy list of expectations they must presently meet. The end result may see CCOs reporting more frequently and directly to the CEO.

David Strachan, head of Deloitte’s EMEA Centre for Regulatory Strategy, explained: “The cumulative effect of regulatory change is significant. For CCOs, taking on a great deal more in their day-to-day roles has become the norm.”

Deloitte’s report also points towards an increasingly ethical dimension around the issue of regulatory compliance, as well as the impact on both talent and technology resourcing.

*Judgement-based supervision

Compliance is an issue for everyone in the company, not just the CCO. The reinforcement of accountability and clarity around individual obligations will lead to a significant change in culture and behaviour, suggests Deloitte, whereby staff are encouraged to take responsibility at all times for all actions.

*Multiple demands

An expanded CCO role will start to include, for example, the ability to apply behavioural economics to identify risks, acting as the adjudicator in ‘claw back’ cases and continual assessment of compliance and conduct risks in new technology.

*Talent challenge

As the CCO role encompasses a broader skill set, so demand will be higher for those professionals who can demonstrate expertise beyond traditional requirements.

The appetite for multi-talented compliance officers comes at a time when some companies are under increasing pressure to reduce costs in order to offset the effect of higher capital and liquidity requirements.

A ‘grow your own talent’ culture is likely to develop while future recruits could be sourced through the graduate route – individuals often perceived as being more receptive to new ways of working.

*Technology changes

According to Deloitte, the correct technology roll-out will be a prerequisite for an effective compliance programme. Having the appropriate technology solutions in place and exploiting them will enable CCOs to improve the efficiency of compliance operations and expand their firms’ abilities to manage and monitor compliance risks.

Technology-supported analytics around compliance data will ultimately bring to the Board’s attention more relevant information on which to base compliance decision-making.

In conclusion, Strachan told Risk UK: “Until this point, many areas within the CCO’s remit fell into something of a ‘grey area’, but the new Senior Managers Regime will require absolute clarity. This will minimise any scope for uncertainty or misunderstanding around the boundaries of the CCO’s responsibilities.”

About the Author
Brian Sims BA (Hons) Hon FSyI, Editor, Risk UK (Pro-Activ Publications) Beginning his career in professional journalism at The Builder Group in March 1992, Brian was appointed Editor of Security Management Today in November 2000 having spent eight years in engineering journalism across two titles: Building Services Journal and Light & Lighting. In 2005, Brian received the BSIA Chairman’s Award for Promoting The Security Industry and, a year later, the Skills for Security Special Award for an Outstanding Contribution to the Security Business Sector. In 2008, Brian was The Security Institute’s nomination for the Association of Security Consultants’ highly prestigious Imbert Prize and, in 2013, was a nominated finalist for the Institute's George van Schalkwyk Award. An Honorary Fellow of The Security Institute, Brian serves as a Judge for the BSIA’s Security Personnel of the Year Awards and the Securitas Good Customer Award. Between 2008 and 2014, Brian pioneered the use of digital media across the security sector, including webinars and Audio Shows. Brian’s actively involved in 50-plus security groups on LinkedIn and hosts the popular Risk UK Twitter site. Brian is a frequent speaker on the conference circuit. He has organised and chaired conference programmes for both IFSEC International and ASIS International and has been published in the national media. Brian was appointed Editor of Risk UK at Pro-Activ Publications in July 2014 and as Editor of The Paper (Pro-Activ Publications' dedicated business newspaper for security professionals) in September 2015. Brian was appointed Editor of Risk Xtra at Pro-Activ Publications in May 2018.

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