Meaningful Compliance

Big Compliance Festival 1. Change and Culture

I survived. Part one of The Big Compliance Festival, that is. All six speakers, including David Blunt from the FCA talked about the importance of culture in compliance.

Let me oversimplify this.

Regulators and supervisors don’t want to see firms being compliant because they have to be; they want to see firms being compliant, because they have understood that good compliance makes for good business.

All members of staff should understand why the firm has policies and procedures, why “Know Your Customer” measures are important.

Covid 19 and the ensuing lockdown have accelerated massive shifts in the way that firms do business, and this in turn will lead to adaptation and evolution of policies and procedures. Everybody will find themselves in uncharted waters – and understanding the “why” will guide the informed creation of the new “what”.

I admit to being surprised to hear FCA talking about the why rather than the what. It felt modern, in touch with current management thinking. (Don’t tell them I said that.)

While it’s heartening to hear regulators being engaging, and culturally aware, it’s daunting too. In my experience, clients prefer dos and don’ts. Absolutes are easier to measure and manage. Culture is ephemeral, difficult to measure, or objectively manage.

There is no suggestion that supervisors are looking to be light-touch. Over the last several years, both HMRC and FCA have been signalling that the “touch” is moving to a “slap”, so there is no room for complacency.

What’s the culture around compliance like in your firm?

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Jamie Larson