Compliance officers struggling to manage the current avalanche of regulatory changes may be interested in how some of their counterparts in the financial services industry are spending their time these days.

Among 337 financial services compliance professionals surveyed by Thomson Reuters Governance, Risk and Compliance, almost 40 percent spend at least half a day every week on updating and amending policies and procedures to reflect the latest regulatory requirements. More than one third of compliance teams spend more than one day every week tracking and analyzing regulatory developments, according to the 2011 Cost of Compliance Survey. Roughly 15 spend more than one man day a week creating and amending compliance reports for the board, including details of regulatory activity and change,

Looking ahead, the vast majority of those polled (86 percent) expect the focus on managing regulatory risk to increase in 2011, with 42 of that group expecting that focus to increase significantly.

Not surprisingly, 71 percent compliance officers expect to spend slightly or significantly more time liaising and communicating with regulators and exchanges in 2011.

The demand for good compliance skills is also expected to increase, according the survey results. Thanks to the increased focus on all aspects of regulation and increasing demands on compliance, 79 percent of respondents expect the cost of senior compliance staff will increase in the next year. Nearly three-quarters (73 percent) of respondents expect the total compliance team budget to increase in 2011. That's in contrast to two years ago, at the height of the financial crisis, when 43 percent of respondents expected an increase, according to the survey findings.

Interestingly, the results also highlight an area where many of those compliance officers don't seem to spending much time at the moment—chatting with internal audit. When asked how much time the compliance team spends in an average week consulting with the legal, internal audit and risk functions, more than half (51 percent) said they spend less than one hour per week consulting with internal audit, while 29 percent of the group report spending one to three hours a week on average. Those compliance officers might want to reassess that relationship, suggest the authors, Stacey English and Susannah Hammond.

“Compliance officers may wish to reconsider the extent of their function's communication and involvement with internal audit,” English and Hammond write. “The need for firms to be aware of emerging risks as well as to utilise available resources as efficiently and intelligently as possible should encourage risk functions towards close and continuous liaison. Regulators expect key regulatory risks to form part of internal audit's monitoring plans so it is important that there is a consistent and joined up approach within the firm.”

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