Banks and Capital Markets Firms Expect to Increase Investment in Compliance By 10 Percent or More
Majority of Top Compliance Managers Report to CEO or Board of Directors; See Opportunity to Deliver More Value to the Enterprise but Are Hindered By Skills Shortage
NEW YORK; Mar. 3, 2014 – Sixty-five percent of banking and capital markets firms expect to increase their investment in compliance risk management at a rate of 10 percent or more over the next two years, as they seek to maintain and expand the stature compliance has achieved in recent years, according to a new Accenture (NYSE:ACN) study.
According to Accenture’s new study, “Compliance’s Seat at the Table – Hard to Earn, Hard to Retain,” despite these investments, compliance organizations frequently fall short of their own expectations, creating the need for yet further efforts to raise the status of compliance within their organizations. Sixty percent of the 100 respondents said they need a stronger compliance culture. Nearly two-thirds (67 percent) said compliance needs to foster greater cooperation with their organization’s governance, and 65 percent said they need to improve regulatory relationships. It is clear that firms have already moved to raise the visibility and connectivity of the compliance function with 71 percent of 100 respondents confirming that their company’s compliance management currently reports to the CEO or board of directors.
The study also revealed that compliance talent shortages are becoming a barrier to success for many companies. Thirty-four percent are looking for compliance talent to hire and 46 percent are planning to expand their compliance teams. In parallel, many are investing in training to improve compliance skill sets.
“Those who do attract or skill up their workforces may benefit less than they hoped unless they also demonstrate enticing career paths for top-notch compliance risk management professionals who are hotly sought after in a relatively small talent pool,” said Steve Culp, senior managing director, Accenture Finance and Risk Services. “Centers of Excellence that create a centralized focus on compliance management may offer career opportunities for ambitious professionals and help organizations attract, retain and motivate the right mix of talent.”
Eighty-five percent of respondents reported that integration of new hires is generally successful but attrition rates are high. As such, nearly half (51 percent) have engaged professional recruiters and head-hunting firms to help them identify and make competitive offers to fill out their compliance management teams. Still, in light of attrition rates, Accenture suggests that more may need to be done to encourage compliance risk management professionals to make longer-term investments in their institutions.
To address strategic goals and keep pace with changes that are on the horizon, the compliance executives most frequently said they are already investing in analytics and risk modeling (53 percent). Furthermore, the majority of respondents are assessing, planning or already investing in governance and oversight (91 percent); data quality, management and architecture (89 percent); and their compliance organization structure (88 percent).
“While compliance organizations are applauded for the strides they are making, there may be headwinds in their future unless they address their concerns about their culture, behavior and operations, and position themselves to handle the ever-changing requirements of compliance management,” said Culp. “Executives will have to be more conscious of demonstrating success in order to secure further investment in talent, tools and technology to boost performance and realize their vision for compliance risk management.”
Although 68 percent of the compliance programs represented in the study are no more than five years old, many are reaching for the next rung with investments in performance measurement that could help them evaluate and deliver evidence of their compliance management results.
Accenture fielded surveys in late 2013 and early 2012 that explored the state of compliance in banks and capital markets firms in Europe and North America, collecting 100 responses each year. Respondents were predominantly those who are responsible for their company’s compliance management function.
Accenture is a global management consulting, technology services and outsourcing company, with approximately 281,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$28.6 billion for the fiscal year ended Aug. 31, 2013. Its home page is www.accenture.com.
Accenture Finance and Risk Services is a business service within Accenture’s Financial Services operating group that provides management consulting, technology and outsourcing services to banks, insurers and capital markets organizations. Its services are designed to help financial services companies leverage the critical functions of risk and finance as competitive differentiators in executing their business strategy.
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