With the onslaught of global disruptions such as geopolitical tensions and emerging technology in the financial landscape, the compliance function within financial institutions must adapt from a reactive, check-the-box stance to a proactive, risk-based, business-focused one.

This is one of the many nuggets of wisdom shared by WMI faculty member Rob Coombes, Chief Compliance Officer, Affluent & Wealth at Standard Chartered. Tapping into Rob’s extensive experience across areas of compliance from regulatory to financial crime and conduct, we sit down with the industry veteran to shed light on the evolving landscape and how compliance professionals can stay competitive in chaotic times.

“Great compliance officers must be willing to challenge the status quo and apply our knowledge and experiences to influence the strategy of the businesses that we support. That’s where compliance officers can offer the most value,” advises Rob Coombes.

The chaotic compliance landscape

Geopolitical tensions have significant influence on regulatory frameworks, and this is particularly evident in the imposition of international sanctions, according to Rob. Current events around the world underscore the complexities and repercussions of strained relations, shaping the regulatory landscape in profound ways.

“Some regulators become far more nationalistic in relation to the protection of data, preventing cross-border sharing of data, or restricting the ability to put data on the cloud, (these measures) will impact strategic moves with regards to globalising an international business,” says Rob.

Closer to home, there are heavy investments to tackle bad actors, but as demonstrated in Singapore’s most prolific money laundering raid last year, there’s a need for an increased use of analytics and intensified investigation, in addition to existing controls such as Enhanced Due Diligence and Transaction Monitoring to identify trends and connect the dots.

The Environmental, Social, and Governance (ESG) movement is one other factor influencing compliance, as governments take steps to address climate change and investors look to ESG products as a credible addition to their portfolio.

Moving forward, there are ongoing attempts to find documented assurance on sustainable development but several challenges persist. Compliance officers will play a pivotal role in identifying and managing risk as the ESG conversation matures, and they will require expansive knowledge of the complexity of ESG products to provide a roadmap for businesses to support a more sustainable future.

Additionally, legal frameworks and organisational resistance can pose obstacles to data sharing which impedes enforcement efforts. Rob believes that there are signs of progress towards public to public, public to private and private to private collaboration which will shape “the industry’s effectiveness to combatting financial crime, leading to an increasing volume of authorities seizing the proceeds of crime.

Conduct risk is not uniformly adopted as a risk type across jurisdictions or financial services firms. However, according to Rob, a conduct risk framework can identify vulnerabilities within the organisation to anticipate and mitigate risk across all types of risk (not just compliance). In addition to organisational design, effective governance, aligned incentives and fit-for-purpose systems, a critical component is diversity and inclusion. When applied effectively, a diverse workforce in an inclusive environment can lead to more agile and productive outcomes.

The upsides and drawbacks of technology

Of all the factors influencing the world of compliance, the rapid technological advancements and its organisational potential for financial institutions is the one to watch. The seasoned expert explained that it could be a double-edged sword – helping in some instances, while creating new challenges in others. He observed this phenomenon particularly in the development of digital assets and the increasing use of Artificial Intelligence. By way of example we are experiencing significant efficiencies as we deploy AI across a broad range of processes but on the other hand we see increased use of AI to perpetrate fraud and misinformation through deep fakes.

This fits into the narrative of Fintech, where technological products and processes have fuelled immense growth in the sector. Statista reported a sharp increase in the industry’s global revenue between 2017 and 2023, and forecasted a continued growth exceeding 141.18 billion U.S. dollars in 2028.

“What’s also important is the focus on the benefits that come from new technology,” says Rob, suggesting that intelligent automation and virtual alternatives can increase productivity for the firms, while growing satisfaction among customers by fulfilling their needs. The deployment of these technologies requires close scrutiny to identify any unintended consequences such as bias and poor outcomes for clients.

“We’ve got the cloud, generative AI, augmented reality; we hear a lot about them, we see a lot about them, but they start to permeate more into the everyday of what we do,” he adds. “So, technology, quite rightly, is increasingly a common theme we’ll see in the objectives across regulators.”

With the daunting complexities in 2024 and beyond, Rob advised three qualities as indispensable assets for navigating the ever-evolving compliance landscape, especially for those looking to enter this industry.

1. Instil integrity in your DNA

“If you’re going to look after clients’ money you have to be able to act with integrity and gain the trust of your clients. The same is true of Compliance Officers, if you want to be the trusted advisor you have to be seen as one that can be trusted”.

Rob believes a key to longevity in compliance is prioritising ethical behaviour in all situations. Integrity is the bedrock of compliance, fostering trust among all stakeholders in trade. This is the first crucial trait that he feels compliance professionals must look towards reinforcing in their work and being able to do the right thing in all situations, to enjoy longevity.

Moving ahead in the dynamic environment, where regulatory landscapes shift rapidly and technological advancements redefine the boundaries of compliance, integrity assumes heightened significance. The finance veteran believes that by prioritising integrity in all interactions and decision-making processes, compliance practitioners can establish themselves as trusted advisors and custodians of trust in an increasingly interconnected world.

The WMI introductory course instils this at a very fundamental level to anyone entering the sector with its focus on compliance culture and ethics, and reminds participants why compliance officers do what they do. “So it gives a very good grounding in any area of compliance,” he says.

Rob believes it not only establishes a set of strong, steadfast principles transferable across various roles in the sector, but also serves as an ethical compass across different functions.

2. Harness compliance eloquence to build bridges and strategies

Rather than just designing safeguards and protocols, Rob believes the best compliance professionals should actively collaborate with key stakeholders in an organisation and eloquently communicate complexities to promote better understanding of policies.

“The value of a compliance officer is always in the area of what’s grey. The black and the white is very easy,” he says. “In the grey, the skillset of a compliance officer is being able to understand the complexity, and then being able to perform analytics in order to understand what is possible and what isn’t, and be able to articulate to the businesses.”

“They [Compliance Officers] have to understand businesses which can be incredibly complicated particularly when you get down to individual product level and they have to be very coherent and articulate what they need the business to do,” he says. This way, effective communication and collaboration become indispensable tools in fostering alignment between compliance imperatives and business goals.

“You can’t take a siloed approach to your responsibility as a compliance officer, you need to be an integral part of the management team,” he adds, emphasising the importance for today’s professionals to refine their skills in communication and collaboration.

3. Adaptability as your quiet power

Reflecting on his decades of experience, Rob has identified mental agility as a crucial trait for maintaining a lasting career in compliance.

“I think about my own career in compliance of over 30 years and how I’ve had to adapt and change to the environment in which I operate, which has included living in 4 different jurisdictions, managing businesses that span the globe, products ranging from current accounts to structured notes, a full spectrum of clients from retail to financial institutions and an ever changing business organisation,” he says. “But also how regulations have changed and technologies and all of the things we’ve been talking about today, you need to remain relevant.”

“And that means changing, at a minimum, at the same velocity as the changes we see around us.”

He brings up the heightened buzz about money mules in Singapore recently. “The way in which we approach risk has to adapt because the nature in how these risks manifest is changing as well,” he suggests. “If you want to target money mules, we’ve learnt that you can’t rely upon the existing technologies and processes that we’ve adopted to address anti-money laundering. A detection scenario kicking out an alert, which is going to be seen several weeks afterwards, is not going to stop the money leaving the account from the unsuspecting victim of the pig butchering scam. So, there needs to be a new approach.”

He also notices an increasing trend where risk management is coming more towards the first line. “Businesses are hiring experienced compliance officers to be integral in the way in which they manage their business, rather than relying on a second line as an oversight and challenge function that raises objections towards the end of a new initiative. The business want and need to know the risks and opportunities from a compliance perspective at the earliest opportunity and preferably through the development stages” he adds. “And I think that’s really helpful.”

Wealth Management Institute offers tailored programs like the Certified Compliance Officer to equip individuals with the knowledge and agility needed to excel in this dynamic field. From revising policies such as MAS Notice 626, the Banking Act, SFA, and FAA, to producing compliance analytics, the programme is a comprehensive education for new joiners and mid-career switchers alike.

Through this course, compliance officers can expect to emerge as proactive professionals with an aptitude for managing today’s risks, while contributing future-ready strategies to business operations. Rob’s insight will provide an in-depth and real-world education for professionals wishing to express ambition in the field, as they learn to meet the evolving needs of banks and regulators.

“It enables you to answer questions from your business partners. It helps you to solve current situations. But good isn’t enough and ultimately, we need to be great!” he concludes.

Learn more about WMI’s Certified Compliance Officer