December 1, 2017

This article 7 ugly truths for compliance officers is not new but the observations still hold.

Compliance is not a favorite topic for many in financial institutions and it’s still extremely hard ‘to get it right’ for any organization. So why is that? Let us share the i-KYC view on this.

First and foremost, the reach of ‘compliance’ or ‘the 2nd Line of Defense’ is (very) limited. It’s not uncommon to have only 1 or 2 compliance officers focused on FEC in an organization with over 1000 staff.

Secondly, the compliance team often focuses on policy setting and case handling. That’s what they should do but that leaves little time for other activities.

Thirdly, most compliance programs focus on rules, regulations and policies. Once policies are implemented, the compliance team ensure the policy is rolled out and will furthermore test the design of SOPs and individual (high risk) cases against the policy. That hardly reaches the entire institution.

These observations point all to 1 key issue: operational compliance can only achieved by the 1stLine-of-Defense. And often nobody is responsible for operational compliance across the organization since AML/CFT touches almost all departments, divisions and units of a financial institution, which makes it difficult to point at 1 accountable department.

Achieving operational compliance needs to be a formal goal for the organization and one executive needs be made accountable for this. Only then there’s a good chance to ‘get it right’.

If you want to know how contact us.