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In an age of ‘compliance officer 2.0′, more is expected of the profession

Risk and compliance professionals have become in high demand in recent years, but more is also expected of them, an industry conference in Hong Kong heard. In particular, compliance officers are expected to exhibit greater business savvy and help drive their organisations forward, said one regional compliance head.

“We’re in the era of ‘compliance officer 2.0′,” said Benjamin Bair, managing director and head of corporate and investment bank compliance for Asia-Pacific at Barclays. He said the days when compliance specialists could sit in a corner and simply interpret regulations and study financials while gauging institutional compliance were long gone. 

“Can they sit with the business and partner with them?” he queried. “That’s part of what our internal clients expect … What’s needed is someone that’s also a marketer and a cheerleader for the organisation.”

Bair was speaking on a panel on the financial sector’s response to the global regulatory landscape at Thomson Reuters’ third annual Pan-Asian Regulatory Summit last week.

“We want doers; not just people who can sit at their desks and analyse [laws and regulations] well. They need to influence the business and influence the culture within the business,” added Fred Pucci, head of compliance, international and institutional banking, and global markets at ANZ Banking Group.

Bair stressed that substantive knowledge of financial law and regulation was important for compliance officers, but other skills also mattered. “Can they communicate effectively? Can they adapt? These things are more important than the substantive knowledge of the past,” he said, adding that compliance personnel now had to “get out there and meet people” to effectively engage in marketing to promote their institutions.

“How people look at compliance has changed,” said Bair. “Now we talk about the legal environment, but also reputational risk; we try to take a holistic view of the business, at a very senior level. An institution that has integrity has longevity,” he added.

Recruitment and retention challenges

Barclay’s Bair acknowledged that globally — and especially in Asia — compliance and risk specialists were in particularly high demand. “People have received fifty percent upticks [in compensation packages] for moving to other firms. Despite the focus on [cutting] costs and a lack of revenues, the market for compliance hiring is high and salaries are up,” he said.

“It seems like these are boom times for compliance officers,” added Sean McHugh, Goldman Sachs’ managing director and head of global compliance for Asia-Pacific. “We are quite busy,” he said.

Talent in unlikely places

Bair said he had discerned a trend of more professionals entering the field with non-traditional compliance backgrounds. He added: “You’ve got to be on the lookout for talent and that means looking in non-traditional places for compliance staff. An ideal candidate has had five years of experience with a regulator and another five years with a bank. Yet, most of those people are already taken and have senior jobs.”

To that end, candidates with audit, operations, front office, external consulting and law firm backgrounds should also be considered for compliance posts, said Bair.

ANZ’s Pucci said: “There are so many different sub-aspects [to compliance]; you need a team with different element s, so it’s about getting the team mix right.”

Yet, Bair also emphasised that individuals from non-compliance fields prepare themselves for long and sometimes stressful hours, which was part and parcel of a modern compliance manager’s job. “For example, there is sometimes tension in talking to colleagues in the U.S. and you don’t necessarily feel you know all that is going on,” he said.

Speaking on the same panel as Bair and McHugh, Catherine Simmons, vice president and head of regulatory, industry and government affairs for Asia-Pacific at State Street, echoed Bair’s sentiments. For example, she acknowledged that sometimes, local institutions had to grapple with overseas rules and regulations. To the extent they were part of global firms or financial groups, however, they ought to draw on the resources of their head office, said Simmons.

“We all work together, compliance, legal and business,” she added. “It’s important to stay on top of all new policy developments in the region. Particularly in non-automated, multi-language environments.”

To that end, every firm ought to hire good, strong, local experts and try to weave them into their firms’ global culture, said Goldman’s McHugh. “Expect that person to have a voice and have a platform to help the firm. We don’t want to make mistakes in this market and impose things if we don’t need to,” he said. McHugh added: “Sometimes it is just laziness to say ‘let’s impose this globally’.”

About Thomson Reuters Regulatory Intelligence

This article was produced by Thomson Reuters Regulatory Intelligence, and written by Ajay Shamdasani.

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