Increased focus on personal liability places more emphasis on senior individuals’ ability to manage and mitigate their own regulatory risk, leaving compliance officers feeling particularly vulnerable
Report shares industry best practices, practical steps to best manage personal regulatory risk
Compliance officers are feeling particularly vulnerable according to a study from Thomson Reuters which finds the near-universal view that personal liability in financial services is increasing.
The Thomson Reuters Personal Liability report finds regulators are increasingly targeting individuals rather than firms, and compliance officers foresee themselves as the focus of accountability rather than CEOs. The findings also highlighted an expectation that regulatory focus towards senior managers will be extended internationally.
Thomson Reuters surveyed more than 2,000 risk and compliance practitioners through Q3 2015, many of whom were asked their views at customer summits in New York, London and Sydney. Comments were also received from Africa, the Americas, Asia, Australasia, Europe and the Middle East. Respondents and participants represented banks, brokers, insurers and asset managers ranging in size from small to international conglomerates including the majority of global systemically important financial institutions (G-SIFIs).
“These findings fall in line with the trends we’ve witnessed for the past several years,” said co-author, Stacey English, head of Regulatory Intelligence, Thomson Reuters. “Our annual Cost of Compliance surveys continually show more compliance professionals are worried their personal liability will increase with each coming year, and this report further reinforces how rapidly the trend is moving.”
Key findings from the report include:
“The regulatory tide continues to rise and both firms and individuals need to be aware of the changes,” said Phil Cotter, managing director, Risk, Thomson Reuters. “The successful companies and individuals will be the ones who are proactive to the new regulations rather than reactive.”
“With this increasingly harsh spotlight focusing on senior individuals, there needs to be a greater awareness to the changes in regulatory expectations,” said co-author, Susannah Hammond, senior regulatory intelligence expert, Thomson Reuters. “That includes awareness of the external regulatory environment, understanding and learning lessons from regulatory announcements, maintaining communication with regulators and a culture of compliance and accountability is established from the top down.”
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