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More rules and higher stakes add weight to compliance’s shoulders


Cheryl Lawson has been working alongside bank compliance officers for nearly 20 years. And during the last decade, she has noticed a substantial increase in the demands and pressure on this group of professionals.

“Over the last 10 years, the compliance officer position has evolved tremendously,” says Lawson, executive vice president of compliance review for Houston-based John M. Floyd & Associates. “Increased regulatory demands and more sophisticated technologies have created many more complex issues that they have to understand and deal with today.”

Whereas a few years ago, compliance officers might have had three to four examinations a year each for two categories of operations, today they might have to deal with up to six examinations with as many as six different categories each, Lawson explains.

And bank consolidation can also make the chores harder, says Alma Angotti, managing director and co-head of global investigations and compliance for Washington D.C.-based Guidehouse, a consulting firm. “As the size of the banks get bigger due to consolidation, the security and privacy concerns become more complicated.”

Beyond tending to the traditional issues that banks have to work with, compliance officers now have to deal with a host of issues specific to separate bank operations – from cryptocurrency to Regulation E and more, Lawson says. “The pressure is a lot greater now, and compliance officers do not want their banks to suffer if there are any violations.“

Executive recruiters who specialize in helping banks find compliance officers with the right skills have also noticed a change.

“The expectations of compliance officers have increased substantially during the past decade in terms of the team leadership experience required,” says Carrie Mandel, a consultant in legal compliance and regulatory practice in the Toronto office of Spencer Stuart, a global executive search firm. “Banks today want stronger leadership skills and a broader knowledge of regulatory issues.”

In addition, new services offered by banks in recent years adds to the potential for security risks that compliance officers need to watch for. Mobile banking, for example, offers many appealing services to consumers, but it also provides more potential for security breaches.

Pressure on compliance officers is coming not just from regulators, but also from private attorneys threatening class action lawsuits if their demands and concerns are not addressed.

“Compliance officers also have to guard against potential litigation. Whether allegations made by attorneys are based on reality or not, you have to be able to defend your institution,” Lawson says.

All this can lead to burnout and considerable turnover in the job. “There is certainly a lot of stress, especially if banks are working under a consent order or have to deal with remediation after a fine or violation,” Mandel says.

Community bank officers often have special issues. While they may have less complicated issues to deal with, they may have to oversee all aspects of the bank operations, whereas compliance officers at larger institutions can often specialize.

“Small institutions may face less risk, but they may not have access to the experience needed,” Angotti says. “It’s not that the people are not smart, but they may not have the sophistication and depth of experience needed to be responsible for compliance across all product lines.”

While banks certainly cannot reduce the demands on compliance officers, there are certain steps they can take to help their officers deal better with job pressures.

“Make sure you have the right person from the start and they are not out of their depth,” Angotti says. “Make sure the background of a new compliance officer fits the needs of your particular institution.”

But that means the competition for that top talent may be fierce. One solution is to make sure pay is high enough to attract strong candidates, but Mandel cautions that “compensation alone often won’t be enough. You have to set a tone from the top down that the bank is committed to compliance.”

One way to show that commitment is to invest in the right tools for the right people. Mandel says technology that helps compliance officers gather and analyze the data they need to identify issues is critical. “Banks have to keep pace with technological systems that compliance officers need to do their jobs,” she says.

One example are systems that automate some of the mundane tasks associated with data gathering. “You can spend 45 minutes collecting screen shots to get the data you need. Or you can use a robotic system to gather the information for you. That’s time the compliance officer can spend on analysis and being more engaged in actual risk reduction,” Angotti says.

Banks can also improve conditions by ensuring that they don’t put all the burden of compliance on compliance officers. “Make sure your front line understands its roles and responsibilities in protecting the institution from risk. Often banks default to compliance officers to mitigate the risk. But it is everyone’s responsibility,” Angotti says.

In addition, having enough personnel on the compliance staff is important. But Lawson suggests that not only should banks increase the size of their compliance staff, but that they should also align with outside partners who can help handle the responsibilities.

“Partners can provide resources so that all the responsibilities do not fall on the shoulders of a few staff members, Lawson says.

A commitment to compliance throughout a bank organization and a commitment to investing in the necessary resources won’t eliminate the pressure compliance officers today have to face. But they can help their officers handle the pressure better and ultimately do a better job for the bank.


Lauri Giesen has spent more than 25 years writing about banking technology and payments for numerous business and financial publications. In the 1990s, she founded and edited Financial Service Online, a magazine covering Internet-based forays into banking and investment services.


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