Corporate Governance

5 Key Trends Facing Modern Compliance Officers

There is no doubt that throughout recent years the role of the global compliance officer has changed dramatically. What are the driving factors of this and what are the implications for the Compliance function?

Nasdaq launched its inaugural global compliance survey, ‘Inside the Mind of the Compliance Officer,’ this year to investigate the changes affecting compliance officers globally and provide further insight into how both internal and external factors have and will continue to transform the compliance role. Over 330 participants responded to the survey, with a total of 158 qualified respondents from 131 firms in the financial services industry. The analysis identified several relevant trends facing modern compliance officers – here are five of the top takeaways from the data.

1. Increased Visibility

Compliance has moved from a traditionally back-office function to a high priority for global firms, thus collaboration between the compliance department and the front-office has significantly increased in recent years. Furthermore, compliance departments are now much more likely to have a seat at the table in executive discussions concerning the strategic direction of their respective firms, with 74% of respondents reporting that they frequently collaborate with executive management.

2. Regulations Drive Compliance

A large driver for growing focus on the compliance function is the increase in global and regional regulations. Among top concerns impacting respondents, regulatory requirements were the most heavily cited. Both understanding regulatory impact and the ability to meet requirements are a major concern across the board throughout the next 12 months.

3. Higher Budget Spend

Along with an increased focus on compliance standards globally is also an increase in compliance spending at many firms worldwide. Over the past 12 months, nearly half of responding firms have increased their spending up to 25%, while 13% of firms have exceeded a 25% increase in spending. This is a notable allocation to compliance in an environment where firms are overwhelmingly looking for ways to cut costs elsewhere.

4. Importance of Research and Education

Only 12% of survey participants stated that they feel completely prepared for upcoming regulatory change, making it more essential than ever to seek educational opportunities to keep pace with the rapidly changing regulatory landscape. Furthering this point, the majority of respondents said they would use an extra hour in the day to catch up on regulatory research or improve the efficiency of their departments.

5. More Proactive than Reactive

Increased regulatory scrutiny has driven many firms to become more proactive in their surveillance and compliance activities. Nearly two-thirds of survey participants reported that upholding and protecting their organization’s reputation was the most important function of the compliance department, while only 15% are prompted into reactivity by fines.

Rob Lang
Dr Rob Lang is the head of the SMARTS and TradeGuard Businesses within Nasdaq and is responsible for the business and product development and delivery of the surveillance, compliance and trade risk product offerings from Nasdaq.

From 2007 to 2013, Rob has lead the technology and software development for all SMARTS products as CTO, before transitioning to the business side in 2013. Prior to joining SMARTS in January 2007, Rob spent ten years in various Technology Management roles mostly in Silicon Valley, California, producing hardware products in the computer graphics and image processing industry, most notably for Silicon Graphics and Nvidia. He specializes in technology management, product development, prototype engineering, innovation, and hiring quality technical teams.

Rob received a PhD in Computer Engineering from Newcastle University in Australia in 1996.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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