Navigating Challenges in Building Optimal Risk and Compliance Teams: A Focus on Recruitment and Skill Development

Amid the high level of volatility in the global financial market and the challenges posed by the COVID-19 pandemic, changes in regulatory approaches, and economic and social crises, professionals adept in risk management and compliance are becoming increasingly valuable to financial firms.

Due to the significant dynamics of these processes, governments, central banks, financial regulators and business owners are paying more attention to the proper management of risks in the field of the innovative technologies, modern online payments, neo banking, cryptocurrency transactions.

In order to overcome threats in these areas in a timely manner and maintain business positions for financial companies, it is increasingly important to have strong risk and compliance teams to help financial institutions move safely and flexibly through these uncertainties.

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Transformations in Compliance Recruitment and Risk Management

In the evolving financial landscape, the demand for qualified professionals in compliance and risk management has become increasingly urgent. This is driven by heightened regulatory oversight, prudential requirements, and the imperative of financial crime prevention, including anti-money laundering (AML) and know-your-customer (KYC) policies.

Addressing Talent Shortages in Compliance

Financial institutions are facing challenges in finding and retaining top talent in compliance and risk management. A study by SWIFT, Dow Jones, and ACAMS revealed that 57% of AML professionals are concerned about the shortage of trained staff, while 36% and 26% of banks and financial companies, respectively, have identified this as a key issue.

Changing Perceptions and Industry Shifts

The perception of compliance as a career opportunity has evolved, with the function now being equated to the role of audit within companies. The increasing relevance of compliance is reflected in the high remuneration for specialists in this field, as businesses recognize the value of skills and knowledge in compliance and risk management.

Social Impact and Career Attractiveness

The compliance function is now seen as a status job position, offering professionals the opportunity to contribute to society by preventing illicit financial activities such as terrorist financing, human trafficking, and corruption. This shift has enhanced the attractiveness of a career in financial compliance, aligning social impact with professional growth.

In an era of market transformations and turbulence, the integration of compliance and risk management skills has become crucial for financial firms aiming to achieve sustainable growth while mitigating regulatory risks.

Modern challenges and decisions in recruiting compliance specialists

Recruiting compliance professionals has long presented challenges for financial companies due to the specific competencies, knowledge, and skills required in this field. The practical lack of formal university MBA programs focused on risk and compliance further exacerbates these challenges. Risk and compliance professionals play a vital role in ensuring the financial and reputational success of companies by developing recommendations that strike the right balance between risk and reward.

Expanding Role of Compliance Officers

The Covid-19 pandemic and the surge in online financial functions have heightened the complexity of technological innovation and payment infrastructure, significantly increasing the challenges faced by compliance officers. Consequently, the expectations of compliance officers have expanded significantly, leading to a more multifunctional role within companies.

Trends in Recruiting Compliance Specialists

Amid these changes, two key trends have emerged in recruiting compliance specialists:

Expansion and Deepening of Required Skills: The skills needed to succeed as a compliance officer are expanding and deepening, reflecting the evolving landscape of compliance and risk management.

Increasing Competition for Diverse Skill Sets: There is a growing competition for compliance professionals who possess or demonstrate the ability to develop both traditional and new skills and capabilities, reflecting the dynamic nature of the industry.

Addressing Growing Challenges

The stresses of recent years have led to burnout in many highly intelligent professions, prompting a shift in talent to other areas. Financial companies are facing serious challenges in recruitment, increasing the risks associated with finding suitable talents. These challenges include the need to hire compliance specialists with knowledge, experience, and skills in various areas of finance, such as cryptocurrency markets, artificial intelligence, technological vulnerabilities, and third-party risk management.

Embracing Talent Development and Retention

To address these challenges, financial firms are exploring the recruitment of compliance talent not only externally but also internally, recognizing the value of integrating individuals who are already familiar with the corporate culture. Furthermore, ensuring a conducive work environment, competitive remuneration, and work-life balance has become increasingly crucial in attracting and retaining compliance professionals amidst the evolving landscape of risk management and regulatory compliance.

Conclusion

In the current marketplace, financial institutions can gain a lot by developing a strong culture of compliance. Add to that the mitigation of risks, saving costs, and increasing efficiency, firms can also position themselves to attract the best professionals in the increasingly competitive recruitment market by engaging in a compliance team of highly professional, talented people with unique thinking and skills, able to identify risks and interpret complex problems, financial firms gain the key value of preventive protection at every stage of making decisions in destabilizing financial markets.

At PayCompliance, we have 18 years’ experience of supporting the success of payment institutions across 6 countries. Our customised compliance services to help you meet FINTRAC requirements as a Real Estate broker, sales representative or developer.

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