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Compliance: The Pragmatists

Love them or loath them compliance teams are the unsung heroes of the financial services industry. I wanted to make people aware of why they are needed and what their role entails.

Compliance officers are responsible for internal/external procedures and frameworks that keep their related companies compliant with all new and existing regulations. These duties will be done either by, in the case of a smaller company, one person (a compliance generalist) who would cover all aspects of compliance and financial crime. Or in larger companies these duties get separated out into specialised teams.

Here is an example of some of the duties performed by compliance professionals, their scale and reach normally corresponds with the size of the company they work in.

Financial Crime/AML/Sanctions: This is making sure that companies know where money coming into the company is coming from. Sanctions checks are required by Financial Crime laws. These checks allow you to see if a company has been sanctioned or if a politically exposed person is connected to the company.

KYC: In the case of retail insurance, this can be as simple as checking your home address is right. On the other end of the scale, this is checking that companies and their owners are working within the confines of the law and not related to organised crime, fraud or terrorism.

Compliance Monitoring: This is the quality assurance testing carried out over the day to day activities of a business. The team usually sits independently in the second line of defence and report to the board with assurance that the firm is operating within a compliant framework.

Conduct: This function makes sure that everyone from customers to corporations are treated fairly. It also goes towards building a fair complaints structure to make sure issues can be resolved.

Compliance Advisory: Compliance advisory teams most commonly review business practices, conduct investigations and identify potential risks. They will maintain regulatory knowledge and use this to review and update internal policies, prepare and file required documents and educate staff.

If companies do not have a proper compliance framework in place, they will inevitably get fines that can reach eye watering amounts, they can be shut down and the people responsible can even face prison time. Not to mention reputational risks that can damage individuals and companies beyond repair. Its squeaky bum time for CEOs across the globe as they fight off cold sweats, worrying about how best to negotiate the mine field that is regulation, standards and policy, and how they will deal with those changes (The fact that they are doing their worrying in a handmade Italian leather reclining office chair makes it no less fraught).

The need for increased duties in an insurance compliance team go beyond standard regulatory matters. They train companies on how to stay compliant while being commercially viable, they utilise emerging technologies (which I will look into further in my next article) and they also make sure C-Suite are fully prepared for their interactions with the regulator.

The above is a glimpse into the duties of a compliance team. They try and walk the fine line between protection and profitability and their role will have to change and adapt as Insurance does.

I am not a compliance professional nor an expert in the field, I have however met a fair few compliance professionals. They are more pragmatic than ever as they are no longer a tick box function. They are now working with businesses to maintain strong lines of defence so they can develop new products and have better customer outcomes. Compliance teams in all their sizes and functions keep companies on the straight and narrow.

In my next article I hope to outline how technology is being utilised to help keep companies’ compliant and how the same tech is making the job harder than ever.


By Gary Melville

To discuss this article or current compliance vacancies with Gary please contact him on or 0203 5877 382


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