A word from our CEO
Compliance professionals play a critical role in keeping their bank — and society as a whole — safe from criminals. From terrorism financing to drug trafficking, compliance departments are the last line of defence to keep us safe.
But being a compliance officer today is hard. Compliance is changing fast. Regulators are cracking down, new laws are being passed, and criminals are getting more and more savvy every day.
Our inaugural “Life in the Compliance Department 2021” report aims to put some hard numbers behind the challenges of modern compliance professionals.
Our goal with these findings is to help compliance professionals succeed in the years ahead by getting ahead of the curve and preparing themselves and their organisations for the trends and technologies that will shape the future.
— Ian Henderson, CEO, Kyckr
On October 6, 2021, we surveyed 244 compliance professionals who work in banking, and here are some of the insights we discovered:
72% feel somewhat or very burned out at their work. Additionally, 41% feel they are not being compensated fairly for their value.
37% said their job got harder in the past year. This is likely due to pandemic-related stressors like remote work, increased cyber threats, and more. Additionally, 34% attribute their job getting harder due to new regulations.
50% of respondents do not have the tools they need to do their job effectively. 43% also said they do not have the training they need to do their job effectively, either.
41% are using fully automated processes. This despite seeing advantages like streamlining the onboarding process, freeing up human capital, and improving the customer experience. 54% also believe that automation will replace them.
53% want to change jobs or companies in the next year. However, they cite that their organisations could provide more training and tools to retain them.
44% wouldn’t be surprised to see their bank in the news for an AML-related fine. Despite being the first line of defense for their organisation, our respondents don’t believe that they have the tools and training to keep their organisation safe.
On October 6, 2021, we surveyed 244 compliance professionals. The survey was conducted online via PollFish using organic sampling through Random Device Engagement (RDE). Learn more about the Pollfish methodology here.
Part 1: Profile of Who We Surveyed
On October 6, 2021, we surveyed 244 compliance professionals who work in banking, employed full time.
Of our respondents, 54.9% are male and 45.1% are female. The majority are younger than 44, with 21.3% between the ages of 18 and 24, 27.1% between the ages of 25 and 34, 24.6% between the ages of 35 and 44, 15.2% between the ages of 45 and 54, and 11.9% over the age of 54.
Our respondents represent four different countries: US (77.5%), UK (18%), Canada (3.7%), and Australia (0.8%)
In terms of job title, the majority of our respondents (27%) are Money Laundering Reporting Officers, or the Head of Compliance/Financial Crime/AML/KYC. 20.9% are working as KYC/AML specialists. 18.9% are onboarding specialists, onboarding managers, or onboarding directors. 18% are compliance managers, compliance officers, or compliance analysts. 15.2% have a different job title.
Our respondents are about evenly distributed in their seniority. Entry level makes up 30.3%, mid-level makes up 21.3%, senior level makes up 25.4%, and C-level makes up 23%.
The majority of our respondents (27.9%) are working at regional or local banks, with 24.6% working at credit unions. 18.4% work at digital-only banks, and 11.1% work at global banks. 18% work at a different kind of bank.
While our respondents all work in banking, and are all in roles dedicated to keeping their institution and their customers safe, they’re all in somewhat varied roles and seniority levels, and at varied types of banks. Their experiences should be able to give us a well-rounded sense of life in the compliance department.
Part 2: State of Life Inside the Compliance
This past year has been a challenge for all of us, not just with a global pandemic affecting our health, but affecting how business is run, too. The shift to remote work has provided industries with ways to continue working, but has opened up new digital security issues as well. How have all of these changes impacted compliance professionals?
3 out of 10 feel their organisation didn’t do a good job of maintaining compliance policies throughout COVID.
Considering the massive impact COVID-19 has had on society, we first wanted to know how our respondents felt their organisation did on maintaining customer compliance policies. 40.2% replied that they thought their bank did very well when it came to maintaining customer compliance throughout the pandemic, whereas 28.7% thought they did somewhat well. 31.1% felt they did not do so well at it.
72% feel somewhat or very burned out at work.
In addition to the challenge of COVID impacting business systems, we wanted to know how it impacted them. 39.3% said that they feel very burned out at work, while another 32.4% said they feel somewhat burned out at work. Only 28.3% said they don’t feel burned out at work.
37% said their job got harder.
Additionally, the majority (37.3%) reported that, over the past year, their job got harder, likely due to pandemic-related stressors in the form of remote work, work uncertainty, increased cyber threats, new policies, and more. 34.8% reported that their job stayed about the same in terms of difficulty, while 27.9% felt that their job got easier.
41% feel they are not compensated fairly for their value.
58.6% feel that they are compensated fairly for the value they bring to the organisations. However, 41.4% feel they are not.
Already we get a bit of a grim picture of the challenges compliance professionals have had to face in the past year. 71.7% feel either somewhat or very burned out at work, and over one-third report that their jobs got harder over the past year. Additionally, four of ten compliance professionals feel they’re not being paid for the value they’ve brought during this trying time. The fact that 31.1% felt their organisation didn’t do well over the past year maintaining compliance policies means they also don’t feel like they have the tools, bandwidth, or staffing to do their jobs to the fullest.
Part 3: Impact of Regulations
In the previous section, we examined life overall in the compliance department. We also wanted to know about life under ever-increasing regulations.
34% said their jobs have gotten harder because of new regulations.
We saw above that 37.3% reported that their job got harder over the past year. Here we find that 34% attribute new and shifting compliance regulations as making their job harder. On the other hand, 30.7% said the regulatory environment has made their job easier. For the majority of our respondents (35.2%), they said that regulations had no effect on their job.
Because our respondents are essentially adhering to the same regulations and policies, we can conclude that it may not be the regulations themselves that are making their jobs either easier or more difficult, but the tools and resources our compliance professionals have at their disposal in order to adhere to these regulations.
44% rely on registry data for their KYC process.
When it comes to relying on registry data for their KYC process, the majority (43.9%) replied that registry data is an essential part of their KYC processes. For 32.4%, registry data is a nice-to-have resource, but that they use other reliable data sources. For 23.8%, registry data plays no part in their KYC processes.
44% wouldn’t be surprised to see their bank in the news for an AML-related fine.
When asked if they would be surprised to see their organisation in the news for an AML-related fine, 55.7% said yes, they would be surprised—meaning that they’re familiar enough with their compliance stance to assume that it’s secure. However, 44.3%—nearly half of respondents—said they would not be surprised, meaning they have doubts about how secure their systems are.
We’re starting to see the challenges in the compliance department emerge. About a third of compliance professionals report burnout, not being fairly compensated for all the work they’re doing, and growing job difficulty. An increase in complexity in the regulatory environment is also putting pressure on compliance professionals. In the previous section, a third reported that their organisation didn’t do a good job of maintaining compliance over the past year, and in this section, nearly half said they wouldn’t be surprised to see their company in the news for a regulatory issue.
However, about a third of compliance professionals report that their jobs are getting easier, that regulations are helping and not hindering their work, and that they’re doing fine on compliance management. So is it the regulation? is it the lack of tools, resources, and dedicated staff that are causing this difference?
Part 4: Tools and Training
In our next section, we wanted to investigate the tools, training, and resources that our compliance professionals have at their disposal, and if they’re enough for our respondents to successfully perform their job and keep their bank and customers safe.z
Half of respondents have the tools they need to do their job effectively.
Do our respondents have the tools they need to do their job effectively? Our respondents are split, with 49.8% saying that yes, they do have the tools, while 50.4% said that no, they don’t.
43% said they do not have the training they need to do their job effectively.
What about the training needed to do their job to the fullest? 56.8% said that yes, their organisation does provide them with the training they need to be effective, while 43.4% said they do not.
We’re seeing here that only about half of compliance professionals feel that their organisation provides them with the tools and training they need to do their job effectively. The other half does not feel that they have the tools and training, which can explain the felt burnout, the job difficulty, and the ineffectively they see in their ability to maintain customer compliance.
Part 5: Automation
Automation can be an incredible benefit in an industry that deals with regulation and compliance, because it can streamline processes, make the team more efficient, and remove the potential for human error. But are our compliance professionals embracing automation?
40.6% are using fully automated processes.
How automated is their KYC and onboarding process? The majority (40.6%) report that their processes are fully automated, whereas for 33.2%, their processes are partially automated. 26.2% are still fully manually managing the onboarding process.
A quarter of respondents believe they could be entirely replaced by automation.
Do our respondents believe that they could be replaced by automation? One-quarter (24.6%) said that yes, they believe that 96% to 100% of their job duties could be replaced. However, 15.2% believe that none of their job could be replaced by automation.
Automation can streamline onboarding, free up human capital, and improve the customer experience.
Here are some of the ways that our respondents believe automation would be able to help improve their business processes, in order of most effective:
- Streamline the onboarding experience (23.4%): Automation could create a quicker and more efficient onboarding experience for their customers, and an easier process for compliance professionals.
- Other (18%): The second highest-rated application of automation is in various other areas of their job.
- Human capital to focus on more value-added tasks (16.8%): Automation can free up their staff to apply their skills and talents in other areas where expertise is needed.
- Improved customer experience (15.2%): Automation can improve the customer experience overall by getting them up-and-running faster, and reducing friction.
- Meet your regulatory obligations (13.9%): Despite the importance of maintaining regulatory obligations, only 13.9% of respondents felt this was the biggest benefit automation could provide.
- Reduce operational costs (12.7%): Automation can also help reduce operations costs, most likely due to its efficiency in streamlining processes.
54% believe automation will replace them eventually.
Are our respondents worried that automation would replace them? 54.5% said yes, they are, while 45.5% are not worried.
Automation has a lot of benefits, many of which our respondents listed, including streamlining the onboarding experience, freeing up human capital, and improving the customer experience. And while a full one-quarter of respondents believe that their jobs could be nearly 100% automated, only 41% of respondents said their organisations are utilising full automation in their KYC and onboarding processes right now — meaning that 60% are losing out on the benefits listed.
Part 6: Outlook for the Future
What does the future hold for life in the compliance department? We’ve already surfaced concerns around burnout and fair pay, and over half are worried about their job being replaced by automation. So is it a bright future for compliance?
53% want to change jobs or companies in the next year.
Since we’ve discovered their concerns around burnout, fair pay, and automation, we wanted to know if our respondents are planning on changing companies, or even jobs, in the next year. A little over half (53.3%) said that yes, they are planning a move, while 46.7% will stay put.
Organisations can keep them by providing more training and education.
If they are looking to switch companies, what could their current company do to keep them? Here’s what they replied:
Provide more training and education (33.1%): The majority want more training and education in order to help them do their jobs better. This may help combat the burnout and ineffectiveness they’re experiencing.
Hire more team members (23.9%): Nearly a quarter want more staffing, and may be experiencing burnout due to absorbing more job duties than they’re used to.
Provide access to better tools (17.7%): Some cite providing more access to better tools might encourage them to stay, so they can be more effective.
Pay better salaries and benefits (14.6%): Despite 41% feeling they weren’t being fairly compensated, getting paid better was lower on the list of reasons to stay.
Nothing (10.8%): Finally, 11% report that there’s nothing their organisation can do to keep them from walking out the door.
It seems that the future of life in the compliance department might be life in a different compliance department! It seems that much of the unrest of the past year has been challenging to compliance professionals, and they’re reevaluating what they want in a workplace. However, the fact that they cited that more training and education could keep them there, in addition to the fact that only half said they have the right training to do their job, means that not only could onboarding and KYC processes be improved by better access to tools and education, companies could find that solution retains their valuable talent as well.
Life in the compliance department is in a challenging spot right now. Compliance professionals are burned out, understaffed, and finding their job only getting harder by the day. However, many are also lacking the tools and training to do their job effectively — tools and training that can not only improve and streamline the KYC and onboarding experience for customers, but that may serve as a way to retain this highly-skilled talent. What it comes down to is organisations recognising the value the compliance department brings, and investing in them so they can continue to do their jobs effectively, and keep everyone protected.
As we know, KYC compliance is only going to continue to evolve, and organisations need to be prepared for that. According to Raj Tripathi, Senior AML/KYC Compliance Professional, Asia, “Business owners should prepare for a future where they are constantly relearning, adapting and innovating in order to thrive. The trends highlighted represent a huge opportunity for those ready to embrace change and adaptability is the answer in this fast-paced, ever-evolving world.”
Perpetual KYC will become the standard approach, and automation and digital adoption will only increase. “To this end, we expect that what is today considered deep due diligence will, in the future, be the standard level of reporting as financial professionals will adjust to the need for more in-depth coverage of all risks associated with a given individual or entity,” notes Miriam Goldman Epstein, Operations Manager, SQOPE S.A.
Additionally, regulations will only become more stringent, so organisations need a level of resilience and operational excellence to be able to keep up. “Growing international awareness of the US as one of the top remaining secrecy jurisdictions was part of what led to the AMLA and its heightened requirements,” says Michael Ronickher, Partner at Constantine Cannon LLP. “Our relatively lax system will continue to be tightened as domestic policies are brought in line with the best international standards.”So, is the future bright for those in the compliance department? Only if they have the tools to meet the challenges of tomorrow.