Scientist or Artist is the CCO? – An AML Compliance View

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With multitude of technical requirements regarding  various laws and
regulations, the Chief Compliance Officer has to master the science of
Compliance.

As the going gets tough, the job now does not restrict to just writing policies
and maintaining procedures. It is now a visionary role with top-notch disclosures to the board while steering the organization in the right path.

Stakeholder management has become the buzzword, and is getting harder by the day in an effort to maintain healthy relationships, yet without losing focus on the key compliance objective.

A range of responsibilities are hovering this key personnel ranging from anti money laundering, ABC, anti trust, G&E, consumer protection and practices that are deceptive and unfair to policies around bringing one’s own device to office.

Managing legacy systems and their burdensome affair considering latest
regulations and technological advancement is placing immense pressure on these  professionals to be technically adept too. It is now unfair to make a comment that I “mind my own compliance business”. Right from technical integration’s ranging from data mapping to understanding ETL technologies have become the norm, during the implementation of AML technology, to quote as an instance.

The expectations for that of regulators now is to embed compliance into the
integrated risk management framework to have a more vocal role in the board
room. There is however increased pressure to perform and meet all of these
objectives with yet minimal skilled staff. Markets are under pressure to cope up
with the requirement of these professional who will need to integrate various
aspects while they perform the role.

It is noteworthy that certain egregious non compliance issues with respect to
regulatory settlements do demand a different reporting lines for the CCO. That is to say, reporting lines should not be aligned to a legal or that of a financial
officer.

There are two perspectives to the role with one who champions and advances the framework in identifying the key requirements by law, regulation and contractual obligation, while assessing the gaps and risk of non compliance. The other is to coordinate and integrate cross functional application of the framework at an enterprise level.

The other angle of the CCO is to draw the line of defense who evaluates the
current state with quality risk assessments, yet without losing focus over design
and implementation of risk mitigation plans. The said act has to be focused
arbitrating disagreements between operating and functional units.

Playing the role of a champion and reporting to ‘C’ level executives is a big
time responsibility and will need to be therefore vested with authority to
escalate to the board, and by taking major decisions that can effect the outcome
of organizations vision.

The impetus is on the board to seek relevant clarifications and have checks in
the by-laws that will ensure to have right insights from the compliance function,
while maximizing the benefits of investments and by protecting reputation.

Read my blogs at http://www.compliancesavvy.wordpress.com

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