Compliance Officers: What they do and why they are in demand?

In the contemporary global business environment, the role of a compliance officer (CO) is becoming increasingly pivotal. As enterprises navigate a labyrinth of consumer-oriented compliance mandates, ranging from anti-money laundering statutes to intricate corporate accounting directives, there emerges a pronounced demand for skilled professionals capable of safeguarding organisational adherence to these evolving norms. This surge is observable across diverse sectors, including retail, real estate, healthcare and governmental bodies, where there is a notable scarcity of financial examiners. Particularly sought after are individuals proficient in deciphering accounting laws and regulations, adept at pinpointing and administrating regulatory risk, and capable of cross-functional collaboration.

With the relentless expansion of various phenomena such as cryptocurrency, online retailing, and heightened awareness around data protection and privacy, the complexity and breadth of global and domestic regulatory standards companies must comply with are intensifying. Consequently, the forecast for compliance officers is promising, characterised by abundant career opportunities and competitive remuneration, especially within the financial services arena. The Bureau of Labor Statistics predict an 18% growth in financial examiner roles by 2030, significantly outpacing the average across all fields. Approximately 6,900 job openings are anticipated annually in the US alone, resulting from compliance officers transitioning between firms or entering retirement. The Robert Half Salary Guide indicates that ongoing regulatory shifts and complexities are major factors propelling the need for compliance experts.

Skills checklist

COs require three primary skills: Firstly, a comprehensive understanding of the law to navigate the often complex regulatory environment, ensuring their organisations adhere to legal standards, thus maintaining integrity and public trust. Secondly, entrepreneurial skills are crucial in identifying and capitalising on opportunities to integrate compliance seamlessly, innovating proactive solutions rather than reactive fixes, to enhance operational efficiency. Confidence in handling data is a third imperative, given the digitalisation of regulatory processes; COs must accurately analyse and utilise vast data sets, ensuring meticulous record-keeping, informed decision-making, and the capacity to foresee and mitigate compliance-related risks.

These combined competencies facilitate a strategic, diligent approach to compliance, essential in today’s fast-evolving business landscape. However, simply having these start-off skill points will not be enough alone to succeed in this profession. There is a wider bank of additional requirements or so-called ‘soft skills’ that will make the difference between being a rookie in the role or a sought-after expert with high levels of responsibility and a commensurate pay packet:

  • Analytical thinking and ability: COs need analytical skills to dissect complex regulations, identify potential risks and propose appropriate measures for adherence.
  • Strong communication skills: Effective communication is essential for articulating compliance requirements, educating staff and providing clear guidance within and outside the organisation.
  • Legal and moral integrity: Upholding legal standards and moral ethics is fundamental, ensuring unbiased, trustworthy decision-making that fortifies organisational reputation.
  • Strategic thinking: COs must strategise to integrate regulatory requirements with business goals efficiently, foreseeing implications and setting long-term compliance objectives.
  • Good command of English: Mastery of English is crucial for interpreting legal texts accurately, drafting compliance reports, and ensuring precise communication in a globalised business context.
  • Expert company knowledge: Understanding the company’s workings and its market dynamics are essential to tailor compliance strategies effectively, recognising industry-specific regulatory demands.
  • Management experience: Experience in management enables compliance officers to lead teams decisively, coordinate cross-departmental compliance efforts, and implement changes proficiently.

What other attributes are valued?

Organised, curious, and innovative, compliance officers swiftly and accurately discern and interpret facts. They also excel in time management, multitasking, and maintaining a holistic view. Diplomacy is crucial, as they engage with various stakeholders, delivering vital assessments to enhance financial health. They articulate issues, suggest corrective measures, encourage solution-oriented collaboration, and oversee remediation.

Staying current with technological trends, these professionals have a track record of addressing compliance infringements. They possess a profound grasp of the company’s ethos and often hold substantial industry experience, especially in heavily regulated fields like financial services. This expertise in broader sector-specific regulations is invaluable.
Additionally, employers appreciate qualifications like an MBA or specific certifications, including CPA, CCEP, or IACCP, recognising the depth they add to compliance understanding and practice.

Starting points

Initiating a career as a CO typically begins with degrees in law, business administration or information science. Typically, these foundational bachelor’s degrees require six to seven semesters, with master’s degrees necessitating an additional three to four, while a law degree may demand around ten semesters. (Of course, educational prerequisites will differ globally from one jurisdiction to another.) A 2022 EQS Group survey highlighted that 40% of FTSE compliance executives possess law degrees, with notable diversity in other academic fields such as sciences, business studies, management, mathematics, and even disciplines like geology and medicine.

Entry into a compliance role directly is uncommon, as the position demands extensive knowledge of a company and its market landscape. Professionals often transition into compliance management after acquiring experience in other roles within the organisation, such as the legal department. The critical importance of legal acumen in compliance management renders career shifts from unrelated fields more challenging, with the most promising prospects often being trained lawyers or business economists who have undergone specific compliance training.

Responsibility and personal liability of Compliance Officers

A CO commands a substantial salary, indicative of the significant responsibilities inherent in the role, primarily guaranteeing the company’s adherence to all legal mandates and ethical norms. They engage directly with management, vigilantly ensuring the company’s operations and objectives align with existing laws, policies and regulations. Consequently, a CO may carry a high level of personal liability risk, given the high stakes of compliance oversight. Insurance policies are even available to assist in the protective management of this issue.

Commendable and yet challenging

Pursuing a career as a compliance officer is both commendable and challenging, offering a dynamic role at the heart of organisational integrity and legal adherence. This position is desirable due to its centrality in safeguarding an organisation’s reputation and operational legality, undoubtedly providing a sense of professional purpose and influence. Additionally, the role promises career stability and competitive remuneration given the increasing demand in various sectors.

However, be prepared for challenges; there will be a need to constantly update professional knowledge to keep pace with evolving regulations, often working under significant pressure to prevent potential legal or financial fallout from non-compliance. Responsibilities are vast, requiring meticulous attention to detail, as they involve overseeing adherence to regulatory frameworks, creating compliance programs and conducting thorough audits. Effective communication is also essential, because of the need to translate complex legal jargon into practical guidance for various departments, fostering a culture of compliance throughout the organisation.

If you are ready for the journey, embracing a career as a compliance officer offers profound rewards, balancing the rigours of constant legal vigilance with the satisfaction of upholding integrity within the corporate landscape. If it is for you, buckle up and prepare for the adventure.