Are Compliance Teams Set to Shrink?

Jonny Drechsler

Are the days of large compliance teams numbered? They’re unlikely to disappear completely but the days of increasing numbers and cost will be a thing of the past as recent research is beginning to evidence. According to, a number of global banking firms are either reducing or planning to reduce headcount within their compliance function in a bid to reduce costs.

This comes after a slowdown in fines for regulatory failings since the financial crisis, which saw global banks pay $321b for failings and led to increased numbers of compliance staff as banks sought to remediate the poor behaviours of the past. Indeed, the reduced need for greater numbers of compliance staff indicates that big banks are learning from the mistakes of the past and are putting effective systems and processes in place to mitigate risks and meet regulatory expectations more efficiently.

Technology in particular, is being embraced as a way of reducing costs, meeting regulatory requirements and improving efficiencies. From automating Know-Your-Customer (KYC) checking to regulatory reporting and activity monitoring tools, the explosion of innovative RegTech solutions has been really exciting to watch and in certain cases, does replace many of the tasks undertaken by compliance professionals.

However, at Recordsure we would suggest that focusing on cost reduction entirely isn’t the way to go. Technology can indeed automate many processes currently undertaken by humans, however it is a long way from being able to replace humans all together. The reality is that experience and human judgement will still be required, particularly when dealing with customers who don’t fit the ‘standard customer’ model. The trick is to use technology to create efficiencies, reducing menial tasks so that the workforce can focus on the risks that pose the greatest threat to customers and the business. Whether firms decide to reduce their workforce and still review at their current levels or retain the same numbers and significantly ramp up their coverage depends entirely on their own business drivers and appetite . Our experience is that many firms most benefit from enhancing their risk mitigation capabilities rather than maintaining them!

Our own solution, Recordsure, is designed to complement your existing compliance and monitoring function by recording and segmenting customer interactions to flag key risk factors and provide comprehensive insight that can be used to help mitigate compliance risk and maximise customer experience outcomes. By flagging specific areas of risk, Recordsure reduces monitoring times and operating costs while enabling your team to focus on those interactions that pose the greatest risk.

We believe the future of the industry will see technology and compliance experts combine to bring about greater efficiency and reduce costs, while also improving compliance and customer outcomes. And while that might mean fewer compliance professionals in the long run, it will almost certainly lead to a better outcomes and experiences for customers.

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