An independent risk and compliance review is often a reasonable strategy to get back on track Part II of II
Copenhagen Compliance® has developed an independent third-party GRC assessment of the financial company's regulatory framework. The aim is to perform a clear eyes review on the costs and headcount components of regulatory compliance and assess the quality and validity of the practical implementation.
The workshop is an exercise to help the financial institutions align themselves closer to global regulatory standards and get accurate feedback on how the current regulatory compliance is functioning as the rules of deregulation and how financial institutions can make the most out of the Dodd-Frank repeal or the current dismantling of the regulatory compliance components as we know them today.
The need to step back and review the current regulatory environment and regime is also exacerbated by the fact that global banks are paring back staff tasked with detecting controls and wrongdoing for the first time since the financial crisis, ending a hiring boom that accompanied $321 billion in fines, as technology replaces employees and penalties wane.
Still, need CxO to provide judgment
Compliance and risk management hiring was the only part that was immune to cost pressure since the crisis. Now financial organisations are looking at massively inflated risk, compliance, legal functions and conclude that since the GRC issues are not resolved the answer is not to hire more GRC staff.
- Royal Bank of Scotland (RBS) Group is preparing to eliminate as many as 2,000 jobs checking new customers for suspicious traits as it digitises the process and the same applies to the UBS Group
- RBS still has about 2,000 staff running know-your-customer checks (two per cent of RBS’s total headcount) until they eventually automate that function and only keep a few people to handle critical issues,
- Deutsche Bank had to boost the anti-money laundering staff but the focus is to replace certain procedures that are carried manually will increasingly be substituted by digital processes.
- As the overall number of people in compliance is reducing, banks are better able to deal with regulatory requirements, as a lot of monitoring and surveillance activity is now automated.
- Zurich-based UBS is using technology to lower headcount at its compliance department,
- New York-based JPMorgan Chase & Co plans to keep its compliance headcount steady in Europe, while hiring selectively, according to a person with knowledge of the matter. While technology will replace jobs in the future, it will be critical for banks to keep some internal policing roles
However, the hiring spree for compliance to document staff money laundering, market manipulation and terrorist financing processes continue to be in focus as banks move past the worst of their misconduct charges. But the low interest and dwindling revenue necessitate the use of technology to control all compliance costs for all financial institutions.
The panic mode is over
The banking industry is likely to employ fewer people as more technology comes in, and more robotics are used. The efficiency will go up, and the number of individuals working in the industry will go down as banks are also turning to technology providers to crunch data and improve the effectiveness of existing employees.
Therefore to avoid risk and compliance gaps, we suggest a structured approach with downsizing workshops as an exercise to align the processes that are closer to new global regulatory dismantling. The result of the workshops will provide an accurate feedback on how the current regulatory compliance can be re-regulated of the entire mass of regulatory compliance components as we know them today.
For additional workshops see; http://www.copenhagencompliance.com/CC_Global_GRCIT_Model-Brochure.pdf
http://www.copenhagencompliance.com/Senior-Manager-Regime-Brochure.pdf
