A Month in the Life of a Compliance Officer

When Compliance Goes Wrong

Compliance is one of the highest growth industries in America. Since 2000, the number of professionals working in the field has tripled, with finance companies paying six figures for those at the top of their game. Manicurists, human resources managers, event planners and massage therapists have all proliferated more quickly (according to the Bureau of Labor Statistics) but compliance officers are not far behind. JPMorgan alone employs 3,700. 

Tasked with keeping colleagues on the right side of the law and in adherence with relevant regulatory and professional standards, compliance officers are often up against it. As penalties for infractions escalate, the stakes have grown. Last year, the Securities and Exchange Commission levied $5 billion of fines, taking its five-year cumulative take to over $24 billion. Other regulatory bodies have similarly ramped up enforcement efforts. Including losses suffered through ineffective processes, errant employees and failed systems, banks globally have hemorrhaged an average €21.5 billion a year over the past six years, according to operational risk data firm ORX. In August alone, losses exceeded $2.5 billion. Compliance officers provide a line of defense against these risks.

To understand the life of a compliance officer better, let’s take a look inside that $2.5 billion. Five events account for almost three-quarters of August’s losses: an Indian banking fraud, an indulgent fund manager, an old-fashioned Ponzi, a crypto firm thinking the rules don’t apply to them, and the latest salvo of an ongoing recordkeeping investigation that has already snared 54 major financial institutions. Each one highlights the challenges faced by compliance staff as they navigate rules that make sense, rules that don’t, bosses that comply and bosses that don’t. 

Let’s take them in reverse order: