- Changing consumer behaviors and increased adoption of digital technologies are creating more complexity in financial services firms, which will require compliance officers to modernize their function, according to a new Accenture report. Compliance officers will need to adapt their programs to navigate disruption in the industry and to continue to demonstrate value within the organization.
The report, titled “Be the Disruptor, not the Disrupted: Accenture 2015 Compliance Risk Study,” follows up on Accenture’s 2014 Compliance study and is based on a survey of compliance officers at 150 banking, insurance and capital markets firms across the Americas, Europe, and Asia-Pacific. The 2015 study found that investment in the compliance function continues to accelerate, with 76 percent of respondents expecting a total increase of at least 10 percent in the next two years.
The results of the survey 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. However, 59 percent 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.
“Financial services firms are rapidly evolving their business and go-to-market strategies to deliver products and services to customers how, when and where they want them,” said Steve Culp, senior global managing director of Accenture’s Finance and Risk Services practice. “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. 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.”
Modernizing the Compliance function to add value
Eighty percent of respondents 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,” said Samantha Regan, a managing director in Accenture Finance and Risk Services and lead of the Regulation and Compliance practice. “Investing in forward-looking tools, such as data management and predictive capabilities, and building a team capable of working with these tools, can provide a view of the firm’s unique risks and help position compliance as a disruptive force capable of supporting and driving change in the organization.”
Accenture Finance and Risk Services is a business service within Accenture’s Financial Services operating group that provides management consulting, technology and outsourcing services to banks, insurers and capital markets organizations. Its services are designed to help financial services companies leverage the critical functions of risk and finance as competitive differentiators in executing their business strategy. It provides updates on the latest news and analysis of regulations across major global economies through the Accenture Regulatory Insights blog.
Accenture conducted a survey of compliance officers at 150 banking, insurance and capital markets firms across the Americas, Europe, and Asia-Pacific, including US, Canada, UK, France, Italy, Spain, Germany, Switzerland, Brazil, Hong Kong, Singapore and Japan. Respondents were predominantly responsible for their company’s compliance management function. The survey was completed in December 2014.