What is Compliance?

The financial services industry is built on trust; customers must know their best interests are being protected. In many parts of the industry, trust has been supplemented by lots of government regulation aimed at protecting customers, investors and the economy.

The compliance department ensures that internal controls and regulatory processes are carried out, that records are kept and that issues are identified before a customer’s interests are damaged, or the regulator takes action.

Compliance staff monitor many different procedures and processes, which break down into a number of categories.

Regulated products and processes

The selling of mortgages and investment advice are both regulated areas of business. This means that the people selling these services must have the right qualifications and the sales processes must be carefully documented, so that any mis-selling can be identified at the earliest opportunity.

Compliance plays a very important role in ensuring that the selling of these services and the processes behind them comply with regulatory requirements and with the financial services company’s own standards. No bank or other financial services company wants to be hit by a mis-selling scandal.

There are a great many other regulations that banks and insurers need to apply to their operations. These include:

• Anti-money-laundering regulations all financial services institutions have to have processes in place to prevent criminals from depositing money gained through crime in the banking system
• Data protection rules banks and insurers have to comply with data protection laws.
• General duty of care all banks and insurers have a general duty of care to their customers, in order to ensure that customers are sold the right product for their needs.
• Banking Code this is the code that all banks must follow in order to ensure that customers receive good service.
• Treating Customers Fairly this is new legislation that formalises the duty of care. It requires banks and insurers to put in place specific compliance procedures to ensure that the products customers are sold are appropriate for them.

Closely associated with all of these rules and processes are many other compliance procedures and checking processes. To be honest, the list is endles

The compliance function is usually split into teams. These include money laundering specialists, training specialists, monitoring specialists and advisory and product specialists.

The Compliance Officer is usually a member of the audit and/or legal staff.

With the birth of the Universal Bank, where Investment banking and commercial banking are allowed to operate under one roof, the size of compliance departments has grown. Thanks to new regulations and a series of scandals, compliance departments have had a tough time recently.

In 2007 the Markets in Financial Instruments Directive, came into play. This is a complex piece of legislation designed to create a single European financial market, implemented in November 2007.
When it comes to scandals, one of the big issues of the past has been insider trading. In March 2007, the Financial Services Authority (FSA) said there was evidence of insider trading in nearly a quarter of company takeovers.

More recently, the credit crisis has called for tighter compliance and financial regulations.

Various areas in the UK financial sector are policed by different bodies, such as the FSA (Financial Services Authority), the UK Listing Authority (UKLA) and the London Stock Exchange (LSE).

If I work in Compliance what will I be doing?

As well as interpreting the complicated and ever-changing external rules that these regulators lay down, you will create a system of internal rules to apply the regulations. You will then communicate these to employees and makes sure they abide by them.

Jobs in compliance vary, depending on the area in which you work. If you opt for money laundering, you’ll spend your time on the look out for suspicious transactions. Money laundering teams check the identity of the parties involved and ensure the money came from a known and reasonable source.

Compliance training teams preach the compliance message to the bank’s employees. They create and present courses explaining what the rules and regulations are and why bankers need to respect them.

Monitoring specialists check that employees are behaving themselves. Traditionally the realm of junior staff, this role has seen much of its remit taken over by computers. As the head of compliance at one European bank points out: “Our staff send and receive about three billion messages every day. They could never be monitored by humans, but they are monitored by intelligent computer programmes that can spot unusual activities, such as dormant trading accounts that suddenly resurrect themselves.”

Compliance advisors interpret and apply the intentions of the regulator. An increasing number are product specialists who are situated on or near the trading floor. They tell traders whether or not a particular trade can go ahead and suggest alternatives that will be satisfactory to the client.

Typical day to day duties include:

• Administering programmes to ensure compliance with laws and regulations
• Communicating to all employers
• Reviewing and interpreting new rules and laws
• Supervising the institutions records
• Scheduling compliance audits and reports
• Providing the board with compliance reports
• Scheduling and briefing new department
• Recommending changes in policy

How do I get a graduate scheme / internship / entry level job or career in Compliance?

Obtaining a graduate scheme, internship or entry level role in Compliance can be very challenging and competitive – though very achievable by getting your application, CV, interview and general approach right. You can guarantee that ninety percent of applicants for Campliance roles will not know how to apply, so getting your application in the top ten percent makes things a lot more achievable.

Approaching the company in the right way will make all the difference. Combining the right approach with a strong interview (and in some cases assessment centre) writ a strong focused tailored CV will go a long way. Make sure you have gone through the free videos on this sight by entering your name and email address in the top right of this screen underneath the video. Once you have filled this in you will have instant access to everything you need to secure your career in Compliance.

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