“When I grow up, I want to be …” is a phrase many will probably remember from their childhood.
The International Compliance Association (ICA) is a professional membership and awarding body. ICA is the leading global provider of professional, certificated qualifications in anti-money laundering; governance, risk, and compliance; and financial crime prevention. ICA members are recognized globally for their commitment to best compliance practice and an enhanced professional reputation. To find out more, visit the ICA website.
It was a time when jobs were viewed as being for life. A successful career meant promotion within the same company or, at the very least, the same industry.
In business, there was comfort in the status quo, with established firms operating with relatively stable macroeconomics and a strong representation of the workforce by unions. The threat of new market entrants was often minimal. Innovation was a luxury confined to the R&D functions. Profit was the goal.
Compliance with laws, standards, and rules ensured core transactions within an organization were kept under control. There was clarity on roles and responsibilities between employers and employees, and regulators were highly visible—the desired equilibrium being to stay safe and legal while achieving strategic goals.
Many of these certainties have now vanished, and in a rapidly changing digital world, thinking around compliance needs reframing. The question today is whether compliance can keep up in a world moving faster than any had thought possible.
The need to evolve
The speed of change in the workplace truly began to achieve peak velocity in the second half of the last decade. By the end of 2019, decline of industrialization towards a service-based economy had already seen the rise of the gig economy. And a career began to look very different.
In the United Kingdom, zero-hours contracts became widespread in the hospitality sector, increasing operational flexibility but eroding security of income. More people became self-employed, many taking up delivery driver roles for e-commerce leaders. Uber drivers took market share from taxi companies, and deliveries of fast food via app-based orders exploded in popularity. The new motto was “work when and where you need to” but with a lingering concern over whether this was flexibility or exploitation.
Those now working in compliance have been handed a double-edged sword. Never has their contribution been more vital to the success of the business, nor their responsibilities so diffuse. And yet, the weight of expectation can be more cumbersome than tolerable if the primary objectives of the compliance function are not set out clearly, avoiding the trap of compliance being seen either as a business-denying function or a panacea to all a company’s concerns.
Regulation of these activities has struggled to keep pace. Lines have become blurred between employer responsibilities and the rights of individuals. Whether health and safety, data protection, insurance, or taxes, new grey areas of risk and opportunities have arisen.
Many traditional jobs have gone away, and new ones, requiring different skills and technologies, are quickly being created. Consider, for example, the drone pilot in an automated warehouse that removes the need for engineers to climb 50 feet up racking to check for faulty sensors. Automation will also continue to remove many of the routine administrative and manual roles; for instance, automatic cone-laying machines on motorways.
These evolutions were further accelerated by the emergence of COVID-19. The global pandemic forced rapid digitization across the world, making technophobia no longer an option. The overnight switch to remote working necessitated business meetings held over Zoom, Microsoft Teams, or Google Hangout. Lockdowns have taken away face-to-face contact with friends and family, and the online world has become the only place for human connection.
In addition, fragmentation of the global economy has set a precedent for levels of uncertainty and increased pressure to cut corners. Laws and standards might not be established at sufficient pace to keep up. If compliance activity were considered a cost before, is there a danger the perception of compliance is likely to deteriorate further? If so, how can it be rescued and recognized as an enabler?
Moreover, what does this change mean for employment opportunities? With some national education systems having effectively been paused for a whole academic year, how will a skills gap manifest itself in the years to come? The Generation Z demographic will require their preferred employers to be purpose-driven, demonstrating an embodiment of their core values. Yet, Gen Z employees are also more entrepreneurial, and many have side hustles. Whereas larger businesses previously offshored call centers to Asia for cheaper labor, now small businesses and solopreneurs can quickly scale by outsourcing a virtual assistant to the Philippines, social media marketing to Africa, and so on.
Can compliance keep up?
After undergoing the dizzying changes of the last decade, can compliance afford to stay the same?
No, of course not. Like everything else buffeted by the great waves of technological change, compliance must evolve and adapt. To do this, it needs first to assess its objectives and what might stand in its way. It needs to scan the horizon for those things that can interrupt or damage achievement. And most crucially of all, it then needs to formulate a plan that can set out how to achieve a firm’s goals and contingency plans for potential disruption.
This means those now working in compliance have been handed a double-edged sword. Never has their contribution been more vital to the success of the business, nor their responsibilities so diffuse. And yet, the weight of expectation can be more cumbersome than tolerable if the primary objectives of the compliance function are not set out clearly, avoiding the trap of compliance being seen either as a business-denying function or a panacea to all a company’s concerns.
Such views are increasingly rare. Compliance is now placed on a pedestal few would have envisaged a decade ago—indeed, this is a wonderful time to be working in compliance. Employees in the compliance function should relish the growing prestige of their profession and exploit the growing respectability afforded to their role. To maintain this, and to keep up with endless technological development, compliance staff must remain informed, engaged, and up to date.
That is the key message to remember when considering the change seen over the last 10 years. If it is to continue—which it likely will—then those in the compliance function need access to the latest knowledge and information and to keep an eye out for pending developments. Doing so will ensure compliance remains effective in the uncertain years ahead.
The International Compliance Association is a sister company to Compliance Week. Both organizations are under the umbrella of Wilmington plc.
Jonathan Dempsey, MBA, is the director of Red Laces, a management consultancy unraveling the mystery and requirements of risk, safety, and compliance to empower business leaders toward success. Jonathan is a member of the ICA Panel, a body of leading industry thought leaders and subject matter experts who work in partnership with the ICA to support the compliance community.