High stakes, great expectations: Four things compliance officers wish they would have known

Being a compliance officer in the financial crime field may be a job that is in demand now with so many large domestic and international banks under formal enforcement actions, but getting that experience and finally managing massive cross-border teams is not an easy task.

Moreover, compliance in anti-money laundering, fraud, corruption and other financial crime fields isn’t a specific course at most universities around the globe, so learning that skill set typically comes through old fashioned trial and error and likely some bumps and bruises along the way, through the growing pains of bringing a program up to regulatory standards or examiners simply raising the bar too quickly.

In all, for some in the compliance field – even the most successful and savvy – being a compliance officer has come with some unpleasant surprises in terms of program complexity, the lack of support from business lines and the growing liability they take on for even minor missteps.

ACFCS.org asked several current and former compliance officers at large U.S. institutions what they wish they would have known before getting into their positions. Here are their answers, edited for clarity.

Liability and expectations:

“Ultimately, since doing this since the late 1990s, I wish I would have known how much the job would change and I don’t know if we are done with the changes yet,” said a compliance officer at a large bank in the United States.

“One of the most striking changes is the direct liability of compliance officers for program failures. That wasn’t there before, but it’s manifesting itself now. Before it was the institution that took the fall, and now regulators and investigators want to go after individuals. That is scary because you have more and more people making compliance decisions and the requirements and expectations keep going up higher and higher and so do the penalties.”

Regulatory Tension and program complexity: 

“I wish I had known prior to getting into this job what a pain in the (expletive) the regulators were going to be,” said a second compliance officer at a different large bank in the United States. “The other thing I never realized is just how complex these big banks are. I still feel like I am just scratching the surface of how the bank works and how all of the different parts fit together. The complexity of the organization is something that surprised me. Until you get inside, you just have no idea there would be so many moving parts.”

Business Tension and program complexity:

“The tension with the other business units is certainly one of the big challenges of being a Bank Secrecy Act officer (BSA),” said Nelson Everhardt, a former top compliance official for Bank of America.

“I wish I would have realized that as the BSA officer, you are in a sales position as well. You have to get the business line executives and department heads involved to the point where they feel like they own it and that AML is really everyone’s job. That is one of the things I didn’t realize would have to occur and that it would have evolved to the point it has now.”

“I also never realized that even if the regulations didn’t change, there could be such a difference in the program areas that different regulators would focus on. When I first started this, the exam manual for AML was small and now it’s at some 240 pages. It also continues to evolve all the time, [through guidance and exam priorities]. That is where AML officers can find it challenging to keep up with what is going on. So even though there is no new regulation, there might be a new [criminal or fraud] scheme out and then, all of a sudden, the examiner is focusing on that in your bank. That is one of the things that surprised me.”

New sectors, more penalties:

“When I started, I didn’t realize so many other parts of the financial sector would be brought under AML rules, such as money services businesses, securities, and others,” Everhardt said. “How fast it has evolved and how far is quite astounding. That is interesting because most of the institutions that have gotten monetary penalties had a good program at one point, but got complacent. It’s still surprising to me that institutions still get into trouble with all the attention and focus by the regulators on this area, even the big banks.”