Compliance is one of those corporate areas that flies under the radar, yet it is important as an engine for consumer trust and corporate accountability.
In the world of financial services, which has had to weather a persistent stream of disruption, from Sarbanes-Oxley to digital banking and Covid-19, compliance is key.
‘Compliance officers often handle sensitive and confidential business information, which requires a high level of integrity and ethics’
‘We are entering a post-pandemic new normal,’ says Simon Young FCCA, head of compliance at DBS Bank in Hong Kong. ‘The future demands that we learn how to adapt to new ways of working, new digital products and modes of service delivery, as well as new business models and related risks. These new challenges and changes have shifted the business landscape, bringing in emerging risks and compliance concerns that require a new and open mindset.’
Compliance is a key support function in a bank or financial institution. Compliance officers work closely with management in strategic business planning, regulatory reporting and incident management.
The compliance function plays an important role in safeguarding customer assets by ensuring banks and financial institutions have proper policies, procedures and internal control systems in place that comply with the law and regulatory requirements.
Compliance officers are therefore expected to be familiar with relevant laws and regulations, be able to advise business and management, and to deal with and manage relationships with regulatory authorities and law enforcement agencies.
‘As the head of the compliance function, I am a trusted adviser to senior management and the board of directors, as well as a key ambassador to bridging any gap between the company and regulators,’ says Young.
To work in compliance, you need to acquire the technical skills of relevant domain knowledge and a solid understanding of your industry. But you also need the soft skills of common sense, sensitivity to current affairs and the people around you, and good communication skills.
Other important qualities include being ethical and fair, honest and respectful, open-minded and committed. Young says: ‘Compliance officers often handle sensitive and confidential business information, which requires a high level of integrity and ethics. The role is demanding and challenging, but equally rewarding in terms of personal career development.’
Given that compliance officers are trusted advisers to a business, strong business acumen coupled with a good understanding of business operations, models and related risks and issues are all essential, too.
Against this backdrop, an accounting and finance background provides a strong foundation for careers in compliance, Young says. ‘For instance, as well as imparting knowledge of accounting and financial management theories, accountancy training teaches business law and ethics, strategic business reporting and leadership, and lets students apply theory in real-life situations.’
Getting in and getting on
A background in risk management or audit, particularly with exposure to financial services, provides a solid stepping stone into leadership in compliance. Young, for example, was engaged in banking and financial services audits while working at a Big Four firm. He acquired knowledge and experience in corporate and financial law and regulation, policy and procedure, which all provided a platform from which he was able to make the leap into compliance.
There are further role-related studies that can be undertaken – for example, with the International Compliance Association or the Chartered Institute for Securities & Investment. There are courses, too, in specific areas of compliance, such as law and risk management. Qualifications include Certified Risk Manager or the Institute of Risk Management’s International Certificate in Financial Services Risk Management.
As to where the head of compliance role can lead, the C-suite is the immediate target as a chief compliance officer. As compliance officers deal with various senior internal and external stakeholders, and with regulations tightening around concerns over customer protection, there is also great potential for compliance officers to become future leaders of organisations.