Thomson Reuters Regulatory Intelligence (TRRI) recently released its Cost of Compliance Report 2022. This valuable report and survey identifies the challenges that financial services firms will have to overcome if they are to meet their compliance targets this coming year and beyond.
This 13th edition of its annual report reveals that compliance professionals are already struggling to meet their commitments in the face of an ever-growing range of challenges.
As a result, trying to plan for the future is heaping even greater pressure on an already beleaguered profession.
In order to understand the issues compliance professionals face, the report identifies a number of key areas that are causing the greatest obstacles to maintaining an appropriate risk and compliance culture.
The challenges identified by compliance professionals in 2022 in brief
Based on the responses from almost 500 practitioners worldwide, the main challenges that they expect to face in 2022 are as follows:
- The volume and implementation of regulatory change. Keeping up to date with ever widening and constantly evolving regulations is regarded as one of the most pressing challenges.
- A lack of budget and resources. Despite compliance’s widening remit, staff numbers are unlikely to grow, as a result of staff costs increasing and budgets remaining tight.
- The availability of skilled resources. The regulatory environment has diversified to include areas such as cybersecurity and cryptocurrencies, which require niche subject knowledge that is increasingly difficult to acquire.
- The need for greater operational resilience and cybersecurity. As the risks that compliance professionals have to monitor steadily increase, so has the demand to build increased resilience into areas such as day-to-day operations and cybersecurity.
The report also reveals that among compliance professionals there is an underlying feeling of insecurity and anxiety over the future.
The Covid pandemic remains problematic for many financial firms with lockdowns and restrictions still in place in some parts of the world, resulting in an uneven recovery.
The increase in personal liability for compliance officers may deter people from joining the profession and force more experienced personnel to leave.
There is also emerging evidence that the compliance function is having to work even harder to be heard at the highest level of the firm.
Compliance professionals face having to ‘do more with less’
After years of steady growth in staff numbers, the feedback from the survey reveals that most practitioners believe that their compliance teams are likely to remain at existing levels.
65% of firms in the United Kingdom expect compliance teams to remain the same over the next 12 months. This figure is similar in North America (64%) and only slightly less in Asia (56%).
Not surprisingly, the 2022 results show a growing frustration among respondents.
Despite compliance’s widening duties and staff numbers unlikely to grow, there is a widespread belief that existing personnel will be expected to ‘do more with less’.
As a result, having to deal with increasing regulatory pressure while getting the best out of existing resources is likely to present extremely testing times.
“I am concerned compliance is moving backwards, not forwards. That due to other challenges (supply chain, pandemic, and non-pandemic issues), that we’re getting less budget, getting more isolated, and returning to check the box type of compliance management. We’re in danger of losing the progress we’ve made rather than moving forward into a future state, ideal or not.”
~ Anonymous, United States of America
Can Regulatory Technology plug the gaps?
Technology has long provided organisations of all sizes and sectors with the means to streamline and improve the efficiency of a wide range of operations.
Regulatory Technology (aka RegTech) has been specifically designed with the compliance sector in mind and many companies are looking to RegTech vendors for the solution to their growing challenges.
Automated digital solutions can indeed remove laborious manual processes and help firms to adhere to regulatory changes in a more efficient fashion; thereby improving efficiency, saving time, and greatly reducing overall costs.
However, the report makes the important point that many of the technological solutions on offer are immature and fail to deliver the value that they so eagerly promise.
RiskScreen has a range of leading-edge solutions designed to meet both existing and future challenges
RiskScreen is an award-winning RegTech company that has developed a cutting-edge platform designed specifically to meet the challenges faced by compliance teams.
With flexibility in mind, you can choose individual modules to cover specific areas or install the complete package for a fully integrated solution.
Whatever your requirements, you can rest assured that they will help you to meet increased regulatory challenges in the face of shrinking resources and stricter budgets.
Your anti-money laundering (AML) and know your customer (KYC) processes will be immediately transformed and offer full scalability in order to future-proof your compliance functions.
Whether you need to verify customers and provide a full audit trail using our cutting-edge automated onboarding technology, or screen thousands of customers to address ongoing risk, they are all designed to meet the needs of compliance officers across a range of industries.
To find out more about how RiskScreen can help you meet the challenges you face in 2022 and beyond, please contact us today.
