For the first time since the 2008 financial crisis, financial institutions have begun to reduce headcount in compliance. And while it is impossible to determine any one specific driver of this rollback, it is likely that as the volumes of fines levied in the sector abates—after reaching a staggering cumulative total of $321 billion—senior management may see an opportunity to reallocate resources elsewhere.
Growing automation in financial services firms is also obscuring this dynamic. However, while some jobs that feed into the compliance function—such as the manual completion of AML forms—are, indeed, being digitized, automation is a much broader concept encompassing big data, data lakes, machine learning and artificial intelligence. Combined, these technological advances are already revolutionizing how financial institutions and other large companies collect, manage and use data to inform strategy and make business decisions.
The implications for compliance are transformational and will ultimately change how this function works with the rest of the business, it is likely that it will increase, rather than lessen, a financial institution’s reliance on compliance professionals. Ultimately, the development and deployment of new software needs to be able to produce data that leads to actionable insights if it is actually going to meet the evolving demands of compliance departments. Although the challenge is significant, the opportunity is exponentially greater.