Insights on Global Compliance Practices – Benchmarking Results from Protiviti's Global Financial Services Compliance Survey

Benchmarking Results from Protiviti's Global Financial Services Compliance Survey
Insights on Global Compliance Practices – Benchmarking Results from Protiviti's Global Financial Services Compliance Survey

The financial services landscape has changed dramatically over the decade since the financial crisis. Numerous products and business practices were banned or heavily restricted, capital requirements have been increased, and thousands of pages of new regulations have been issued. There has been a dramatic increase in principles-based risk management and examiners have redoubled their focus on weaknesses identified in their regulated institutions’ risk and compliance management programs, resource levels, and internal oversight mechanisms. Risk and compliance functions drastically increased headcount and other resources to meet the challenges of the new operating environment.

More recently, however, we have observed the financial services industry begin to shift from the regulatory-focused post-financial crisis period into a more growth-oriented operating environment with an emphasis on financial innovation. As the regulatory pendulum swings back to a more balanced position, financial institutions have the ability to stand back and reassess the effectiveness of their compliance functions that have grown exponentially in line with the myriad regulations issued over the past decade. Rather than continue with the traditional practice of adding headcount to solve new problems, firms are seeking ways to cut costs by becoming more efficient and more agile to better respond to the continuing compliance challenge. Over the past couple of years, existing enforcement actions have been resolved successfully and the pace of new actions has finally started to slow. As a result, C-suite executives are scrutinizing requests for continuing risk and compliance investments more heavily, especially in an environment where regulatory pressures are reducing, creating opportunities for business innovation and top-line growth.

This set of circumstances led Protiviti to develop its Agile Risk & Compliance approach. Central to the Agile philosophy is the belief that every organization’s risk and compliance function can be an enabler of their firm’s business strategy, rather than being viewed as an impediment. Having a more flexible approach to risk and compliance challenges, aided by technology and a more aligned strategy, allows companies to ensure they continue to meet the constant compliance challenges and are ready to react quickly to changes in business models and the operating environment.

To be able to more objectively measure the financial services industry’s perceptions of, strategies for and progression toward Agile transformation activities, Protiviti conducted a survey of hundreds of financial services organizations around the world.

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Michael Brauneis, Protiviti Chicago
Michael J. Brauneis
Managing Director