Changing consumer behaviors and increased adoption of digital technologies demand that compliance officers modernize their function, says Accenture in a recent report.
The survey results call into question the strategy and long-term relevance of many current investments in compliance. Eighty percent of respondents acknowledged that new banking business models, driven by changing consumer behaviors and digital delivery channels, will force the compliance function to rethink its operating model, and likely reassess the capabilities required to execute change.
The report is based on a survey of compliance officers at 150 banking, insurance, and capital markets firms across the Americas, Europe, and Asia-Pacific. The study found that investment in the compliance function continues to accelerate, with 76% of respondents expecting a total increase of at least 10% in the next two years.
Compliance resists keeping up with tech
“Firms are adding new products, including non-financial products, and digital delivery channels to keep up with customer demand, which is increasing the need for rethinking existing compliance controls,” says Steve Culp, senior global managing director of Accenture’s Finance and Risk Services practice. “Compliance professionals who can keep pace with this changing ecosystem, partner with the front office and help the organization effectively meet the digital demands of its customers will be integral in driving competitive advantage.”
In spite of disruptive change, 59% of compliance officers surveyed do not think that understanding technology trends is a key skill that they should have or develop over the next five years. And only half believe that understanding changing customer behaviors is important to their function.
There may be a bit of a disconnect. The resistance to adaptation flies in the face of the 80% of respondents who agree that the compliance function’s ability to predict and avoid reputation and financial crime events can drive competitive advantage for banks.
The ability to invest in big data and analytics solutions will enable firms to source more data from a greater variety of places to generate early warnings and predictive insights.
In addition, shared services and utilities can be used to alleviate talent challenges that may emerge as compliance incorporates new technologies into the function.
“Compliance officers have a relatively new seat at the leadership table, but in order to maintain this position they will need to demonstrate good compliance practices that add value to the organization while effectively changing to meet the demands of the market,” says Samantha Regan, a managing director in Accenture Finance and Risk Services and lead of the Regulation and Compliance practice.
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