New digital business models in finance, like fintech, have intensified competition among financial services institutions to become multi-channel operators and meet ever-shifting client behaviors. Compliance risks related to privacy, cyber-risk, and customers have multiplied. In addition, the availability of more sophisticated technology, including enhanced analytics visualization tools, has heightened expectations for compliance to proactively identify, manage and report these risks.

Accenture’s 2016 Compliance Risk Study—based on a survey of over 150 leading compliance officers at banking, capital markets and insurance institutions across the Americas, Europe, and Asia-Pacific—asked respondents to identify the top challenges standing in the way of necessary improvements to the function in the evolving digital ecosystem of financial services.

Not surprisingly, half of financial services compliance officers cited fraud and financial crime as one of the top three challenges they expect to face in the next year.

50% of FS compliance officers see fraud and financial crime as a top 3 challenge for the next year

Compliance organizations have been given the role of “ethical monitor” for their institutions since the global financial crisis and it is natural for officers to continue to place a high priority on continuing to operate as watchdogs.

However, other findings of the 2016 Compliance Risk Study show that the function of these organizations is also evolving with the complex ecosystem of financial services. About half of the compliance officers responding to the survey cited cyber-risk as one of the top three challenges in the next year.

50% of FS compliance officers see cyber-risk as a top 3 challenge for the next year

Alongside keeping up with the rate of technology development, compliance organizations have had to drive the design and implementation of “multi-local” regulatory changes. The significant volume of prudential, operational, and technological regulations has destabilized how compliance is organized, particularly the balance between change management and “business-as-usual” activities.

The Accenture 2016 Compliance Risk Study found that regulation is still a major concern for compliance officers, earning it a spot on the top three challenges for the next year.

41% of FS compliance officers see regulatory compliance risk as a top 3 challenge for the next year

Delivering best-in-class compliance risk management in an era of rising challenges and constrained resources is not insurmountable. But it requires making important choices as to where limited investments should be placed to improve risk-based returns. Compliance organizations need to optimize operations to manage a more complex set of risks; invest in the coverage of new topics such as digital platforms and currencies; and make sure to utilize the talents of senior data officers as critical organizational links.

Ongoing change in the financial services ecosystem is only adding layers of complexity to these decisions and intensifying the clamor for decisive action on the part of compliance organizations.

To learn more, register to download the report: Compliance at a Crossroads: One Step Forward, Two Steps Back?

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