Best Practice and Delivering Value – The Future for Compliance
This paper is a contribution to the continuing debate over the increasingly important and influential role of Compliance Departments in enabling a financial services firm to meet its strategic and financial objectives. It is addressed both to Compliance Directors and to Senior Management who have a significant interest in better aligning themselves and their firms to maximise the return to stakeholders from those objectives. It proposes some answers to those who seek best practice for their Compliance function, and some criteria against which the leading Compliance Department should be benchmarked.
The requirement for change in most Compliance Departments if they are to deliver value effectively comes across clearly. Departments must re-equip and re-skill themselves with new frameworks and methodologies for risk assessment; they must obtain enhanced management information to measure and monitor Compliance. They will need to make better use of new technology if they are to report on and demonstrate Compliance to boards of directors and the Financial Services Authority. In making these changes, they must ensure that they are properly aligned with their firm’s business strategy and the expectations of its major stakeholders.
The research for this paper has been led by Andrew Podd of PricewaterhouseCoopers' Financial Services Regulatory Practice who together with other colleagues, most notably Andy Gordon, has prepared this paper, which as well as reflecting best practice, is also based on discussions with a number of leading Compliance Directors in the financial services sector and on soundings from senior regulators, leading industry executives and other PricewaterhouseCoopers colleagues. We are most grateful to all of these individuals for their contribution.
John Tattersall Financial Services Regulatory Practice Chairman, PricewaterhouseCoopers October 2002