Overcoming the Compliance Resource Vacuum


Since the financial crisis, firms have faced considerable regulatory pressure, with the FCA scrutinising all aspects of their operation in an attempt to ensure the mistakes and poor conduct of the past aren’t repeated.

As a result of the increasing regulatory burden, firms need to ensure that their compliance team has the right knowledge and skills to enable the firm to meet its regulatory obligations. But with significant demand across the industry, finding individuals with specialist skills to supplement your existing resource is becoming more of a challenge.

When facing this kind of pressure, one key area firms are likely to feel the strain is when adapting to regulatory change, but there are ways to overcome the challenges presented by the resource vacuum and growing regulatory demand.

Why is efficient resourcing such a struggle?

At its heart, the financial services market is very re-active. As we approach a major regulatory deadline the focus and resourcing activity hones in on those individuals with the necessary skills to implement the new legislation or oversee regulatory change.

We can see this in the current market, with firms working toward MiFID II compliance ahead of implementation. There’s a real shortage of skilled subject matter experts (SMEs) in this market as the legislation introduces new requirements into the regulatory regime, and firms are quickly trying to get up to speed before January 2018. Similarly, we’re seeing a real push for SMEs with knowledge of the incoming GDPR requirements, which is challenging given it’s relatively new subject matter.

Equally, the FCA’s more forward-looking approach to regulation has seen an increase in the use of thematic reviews to assess whole sectors and identify issues that span a proportion of companies or product groups within it. Where significant, large-scale issues are uncovered, demand for the skills required to address or remediate the issue also increases.

Resource scarcity also leads to increased labour costs, as remuneration increases in order to attract and retain the best talent. Combine this with spiralling regulatory costs and it can be difficult for firms to control the overall costs of meeting their compliance obligations.

Adapting the compliance function to meet changing demand

As the industry adapts to the current market conditions and regulatory framework, firms should be considering how best to evolve their risk management framework to enable them to fulfil their compliance obligations now and in the future.

To ensure they are able to effectively respond to regulatory change, firms should be regularly undertaking the following:

  • Horizon-scanning

In a changing regulatory environment, it’s important to be aware of what is coming down the line and allow yourself enough time to make changes where necessary. Regularly horizon scanning enables you to identify, not only the changes required to maintain or achieve ongoing regulatory compliance, but also the skillset required to meet this need.

  • Talent mapping

Being able to adapt to regulatory change requires not only the right culture, business model and associated controls, it also depends on having suitable individuals, with the right skillset. Talent mapping enables firms to assess the effectiveness of their current employees in light of any forthcoming changes, and identify skills gaps that need filling in order to meet their compliance obligations.

The financial services industry doesn’t stand still. The rate of change that has occurred in recent years is set to continue at a similar rate, with the pressure on compliance resource also likely to continue. Firms that can effectively adapt to this new environment are more likely to successfully meet the demands of the regulator and gain a competitive advantage.

Harnessing the expertise of skilled contractors is a cost-effective solution to augment your existing resource or undertake specialist work, such as regulatory change programmes. TCC’s Specialist Resourcing team can help you find the qualified, skilled and reliable individuals needed to meet your regulatory obligations, selected from our extensive pool of high-calibre Associates.


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