In today's complex regulatory landscape, businesses must navigate a myriad of legal, ethical, and operational requirements to ensure they stay compliant. Whether it’s adhering to the Financial Conduct Authority (FCA) and/ or Prudential Regulatory Authority (PRA) rules and guidelines in the financial services industry, or complying with the General Data Protection Regulation (GDPR), the role of a Compliance Manager has become essential. But what exactly does a Compliance Manager do, and why is their work so crucial to the success and longevity of modern businesses?
In this blog post, we’ll dive deep into the day-to-day responsibilities, skills, and qualifications needed to succeed in this vital role. We will also explore how the role has evolved, especially in the UK, where regulatory oversight has intensified in recent years. Whether you're a business owner, a hiring manager, or someone interested in pursuing a career in compliance, this guide will provide valuable insights.
The Role of a Compliance Manager
At its core, the role of a Compliance Manager is to ensure that a company adheres to all relevant laws, regulations, and internal policies. This often involves a combination of risk management, policy development, training, and continuous monitoring to ensure the business operates within legal, regulatory and ethical boundaries.
Compliance Managers work across various industry sectors, but their key responsibilities remain relatively consistent. Let's break down what those responsibilities typically entail.
Key Responsibilities of a Compliance Manager
Regulatory Compliance
The primary duty of a Compliance Manager is to ensure that the organisation complies with relevant laws and regulations. In the UK, this may include adherence to FCA rules, the GDPR for data protection, the UK Bribery Act, AML Regulations or other industry-specific regulations depending on the size and nature of the firm.
The Compliance Manager regularly reviews the company's activities and practices to identify any areas of non-compliance and takes the necessary steps to bring the business back in line with regulatory requirements.
Policy Development and Implementation
To help the company remain compliant, the Compliance Manager will develop and maintain internal policies and procedures. These policies must be regularly updated to reflect new laws or changes in regulations.
They may also be responsible for developing compliance frameworks and operational models that integrate with broader business strategies, ensuring that compliance becomes part of the organisational culture.
Risk Management
Compliance is closely tied to risk management. The Compliance Manager must assess potential compliance risks and implement controls to mitigate these risks. This often involves performing regular risk assessments and audits to ensure that the company remains compliant over time.
They will also identify gaps in compliance and propose solutions to address these, such as implementing new systems, enhancing staff training, or changing business practices.
Monitoring and Auditing
A key part of a Compliance Manager's role is ongoing monitoring and auditing. This helps ensure that compliance controls are working effectively and that any issues are identified early on. Regular internal audits allow the Compliance Manager to assess the company’s compliance status and report findings to senior management.
They may also be involved in preparing for external regulatory audits, ensuring that all required documentation is in place and that the company can demonstrate compliance to regulators.
Training and Awareness
A strong compliance culture starts with employees. The Compliance Manager is often responsible for developing and delivering training programs to ensure that employees understand their legal and ethical responsibilities.
This can involve anything from data protection training to anti-money laundering (AML) workshops, depending on the sdctor. Regular training helps mitigate the risk of non-compliance caused by employee negligence or lack of knowledge.
Reporting
Compliance Managers are also responsible for reporting on compliance issues to senior management and, in some cases, to regulatory bodies. This can involve compiling regular reports on compliance performance, flagging areas of concern, and recommending improvements.
In more severe cases, if a compliance breach occurs, the Compliance Manager may need to report the incident to the relevant authority, such as the FCA, PRA or the Information Commissioner’s Office (ICO), and work on remediation efforts.
Regulatory Engagement
In some industries, particularly financial services, a Compliance Manager will liaise directly with regulatory bodies such as the FCA. This may involve preparing regulatory submissions, responding to inquiries, or participating in consultations on new regulations.
A strong relationship with regulators can benefit the business, as it ensures the company stays informed about upcoming changes in the regulatory environment and can adapt accordingly.
Product Governance
Compliance Managers play a crucial role in ensuring that products and services are developed and sold in line with regulatory requirements. Product governance involves managing the entire lifecycle of a product—from design to distribution and ongoing monitoring—to ensure it is suitable for the intended target market and does not cause harm to consumers.
A Compliance Manager oversees the product approval process, ensuring that all products undergo thorough reviews before they reach the market. They also work closely with product teams to define the target market and ensure that products meet the needs and risk profiles of the intended customers. Additionally, they oversee the distribution of products, ensuring they are sold through appropriate channels that align with regulatory expectations.
Ongoing monitoring and review is another key responsibility, as products must be regularly assessed to ensure they continue to meet regulatory and customer requirements. If any issues arise, the Compliance Manager takes corrective action to address them. Finally, Compliance Managers must ensure transparency by overseeing reports and making sure the firm maintains clear, fair and not misleading communication with customers about product risks and costs.
With the introduction of the Consumer Duty, there is increasing pressure on Compliance Managers to ensure that products deliver positive outcomes for customers, making product governance a central pillar of their role in financial services.
SM&CR and Firm Governance
Under the Senior Managers and Certification Regime (SM&CR), Compliance Managers play a vital role in ensuring that senior individuals within a firm are accountable for their specific areas of responsibility. They help implement frameworks to meet the FCA’s conduct and fitness requirements, ensuring that senior managers understand their regulatory obligations. This includes overseeing fitness and propriety assessments, conduct rule training, and certification processes for key staff.
In terms of firm governance, Compliance Managers work to establish and maintain governance structures that promote accountability and transparency. They ensure that the firm’s operations align with regulatory expectations, fostering a culture of compliance across all levels of the organisation. This includes ensuring that board-level decision-making reflects proper risk management and regulatory compliance standards, helping to mitigate regulatory risks and enhance corporate governance.
The Evolving Role of the Compliance Manager in the UK
In the UK, the role of a Compliance Manager has grown in importance. There has been a significant increase in regulatory scrutiny in recent years, largely driven by scandals and crises in the financial sector, as well as heightened consumer protection regulations. This trend has only accelerated with the rise of digitalisation and the increasing importance of data protection and cybersecurity.
Data Protection and GDPR
One of the most high-profile areas where Compliance Managers have had to step up in recent years is in data protection, particularly with the introduction of the GDPR in 2018. The GDPR set an enhanced global standard for data privacy, and Compliance Managers in the UK must ensure that their organisations remain compliant with these regulations. The penalties for data breaches can be severe.
Financial Crime and Anti-Money Laundering (AML)
Compliance Managers working in the financial services industry may also need to focus on financial crime prevention (although many have separate Financial Crime Teams). This includes ensuring that their organisations comply with Anti-Money Laundering (AML) regulations and know-your-customer (KYC) requirements. In the UK, the FCA has been particularly active in this area, imposing hefty fines on firms that fail to meet their AML obligations.
Compliance Managers in this sector must ensure that robust systems are in place to detect and prevent financial crime. This often involves working closely with financial crime prevention teams to implement strong internal controls, conduct customer due diligence, and report suspicious activity.
Skills and Qualifications of a Compliance Manager
To succeed in the role, a Compliance Manager must gain/ possess a mix of skills, knowledge, and experience. Here are some key skills and qualifications commonly associated with this role:
Legal and Regulatory Knowledge: A deep understanding of the laws and regulations affecting their industry is essential. This can include sector-specific regulations as well as broader laws such as the GDPR.
Analytical Skills: Compliance Managers must be able to analyse complex regulations and identify how they apply to the company’s operations. They also need to be skilled in risk assessment and problem-solving.
Communication Skills: A big part of the Compliance Manager’s role involves communicating policies, regulations, and risks to different stakeholders across the company. This requires the ability to translate complex regulatory language into understandable terms for employees.
Attention to Detail: Compliance work often involves reviewing large amounts of documentation and data. A keen eye for detail is critical to spot any potential issues before they become major problems.
Experience in Risk Management: Many Compliance Managers have a background in risk management, as the two areas are closely aligned. Experience in developing and implementing risk management frameworks is often highly valued by employers.
Professional Qualifications: Many Compliance Managers hold professional certifications such as the International Compliance Association (ICA) certifications or qualifications from the Chartered Insurance Institute (CII) or the Chartered Institute for Securities & Investment (CISI). For those working in the financial services industry, experience with FCA regulations and qualifications specific to financial crime, AML, or data protection are often necessary.
Conclusion
In an increasingly regulated business environment, the role of a Compliance Manager is crucial to ensuring that companies remain on the right side of the law. By managing risk, developing and implementing policies, and fostering a culture of compliance, these professionals help protect businesses from hefty fines, legal consequences, and reputational damage.
As regulations continue to evolve, the role of the Compliance Manager will only grow in importance. For UK businesses, having a skilled Compliance Manager on board is not just a necessity but is also a strategic advantage.
Do you want to work in Compliance?
For some really useful insights on how you can land a job in Compliance and perhaps work towards Senior roles in this area, check out our youtube channel or Spotify where we feature podcasts from our Senior Careers Show. The series is aimed at up and coming professionals within UK financial services. The host (Kris Bryant) is the owner and founder of STJ. He has spent many years in the industry operating at Board level including Director level positions in Compliance, Risk, Financial Crime and Data Protection. Kris also runs a successful Recruitment Practice where he and his team have placed many candidates in to household name firms as well as startups and boutiques. Each episode of the series features a special guest with excellent credentials and we discuss their journey to the top of their respective industry to act as a point of inspiration to the next generation and help them to map out their own career path. Be sure to tune in for some really useful insights.