The Role of a Compliance Manager in Banking

The traditional role of the compliance function in banking of checking and monitoring operational activities is moving away from a “policing” approach more towards an advisory role.
However, a bank's senior leadership must implement adequate and functional risk controls in operating activities to prevent losses and ensure that employees abide by laws of the land when performing tasks. Today, the compliance manager is often involved in executing compliance controls over daily business transactions as well as providing ongoing compliance oversight. He needs to be both proactive and reactive - helping to ensure that new business is compliant as well as monitoring existing business.

Compliance job roles are required in all divisions of banking at all senior levels: investment, retail, corporate and business banking, credit and loans. There are three main types of risk which must be managed:
Compliance risk: the risk of direct financial loss from failure to meet laws, regulations, internal standards and policies and the expectations of key stakeholders.
Reputational risk: damage that can occur when business behaviour is viewed as inappropriate by stakeholders, whether regulators, customers, other market operators, or the public at large.
Regulatory risk: the risk of sanctions for breaching applicable laws and regulations and/or for not meeting regulatory expectations.

Salary packages in banking compliance are generous and the function has a growing future, providing a career path for aspiring compliance directors. At a senior level the responsibilities would include establishing and implementing a compliance framework and function for the Bank as well as monitoring the Bank’s business activities, sales practices, documents and marketing material, and clients’ statements to ensure compliance with local regulatory requirements.
Additionally, the compliance manager must communicate policy and procedure throughout the Bank and investigate and resolve problems in a timely fashion following established guidelines. One of the main objectives is to create awareness of risks to reputation and integrity and the consequences of regulations within business units.
A bank compliance manager usually has a bachelor's degree in a business-related field or regulatory management. A senior banking compliance manager typically holds a master's degree in business management.

On a personal level, a compliance manager must have good interpersonal skills and the ability to work in collaboration with team members and business partners, such as customers and suppliers. Part of his/her role is to achieve a level of cooperation and understanding internally so that the Bank is exposed minimally to the various types of risk. Recent events relating to collusion and price fixing have highlighted the role of compliance in the financial services industry.