If we go back to the original compliance office, it was staffed with folks from the office of the General Counsel – it had a very strong, if not exclusive, legal slant. In some firms the Chief Compliance Officer (CCO) was actually a position within the office of the GC, with augmentation of resources from the Chief Financial Officer (CFO) office to provide accounting expertise.
In the modern “Compliance Office 2.0” (or CCO 2.0 as I like to call it), we have witnessed a sea change in the resource make-up. Without doubt there’s still a heavy concentration toward the traditional legal and accounting mix, for we will always need folks that are comfortable wading through boxes and reams of paperwork to establish understanding of the rules and regulation onslaught.
At the same time though it is now (thankfully) not a big surprise to see some of the following resources:
- Data scientists and detectives – to make sense of the mountains of data that CCO 2.0 needs to assimilate and understand. These resources can be almost prescient in their ability to identify and act on any high-risk signals.
- Six sigma black belts – to establish rock solid policies, standards, processes and procedures. The firm wants to operate fearlessly “within the tramlines” – these guys make sure those lines are visible.
- IT, cyber and Infosec specialists – these teams are needed to ensure the business is operating on a solid foundation and not exposed to cyber risk, and that PPI data is being handled with the integrity and sensitivity required.
- Front-office domain expertise with trading experience – we need these people to help us find where to set those tramlines mentioned above. Trading activity makes up a large swath of the compliance spectrum and it behooves the CCO 2.0 to have appropriate resource to set policy activity correctly.
- Program management specialists – the old adage of “fail to prepare, prepare to fail” comes to mind. To be prepared, you need a resource that can manage an ongoing program of activity and identify good technology that provides a solid framework for roll-out of the compliance program (like our Ascendant Compliance Manager solution).
In summary, while there’s no doubting the value of lawyers and accountants, the compliance function is much better serviced by a variety of expertise. Roll on, CCO 2.0.
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CSS frequently publishes blog posts which are written by our team from their observations in the field, at conferences and through experiences with compliance professionals. These posts are designed to further knowledge and share industry best practices. Topics run the gamut, including Form ADV, cybersecurity, MiFID II, position limit monitoring, technology challenges and more. Complete and submit the brief form below to receive notifications when we publish new content.