Changing of the guard a frequent occurrence in bank compliance


American Banker | January 3, 2020

The American Banker article, "Changing of the guard a frequent occurrence in bank compliance," quoted Russell Reynolds Associates Consultant Cynthia Dow and featured our paper, "Compliance Comes of Age in Turbulent Times." The article is excerpted below.

Nearly 60% of the largest banks have changed chief compliance officers in the last three years, according to a recent study by an executive recruiting firm.

Russell Reynolds Associates said that 59% of banking chief compliance officers had been named to the role since 2017, compared with 39% in asset management and 19% in insurance. That turnover is largely a function of the way the role has evolved within the changing regulatory environment, said Cynthia Dow, a Russell Reynolds consultant who leads its legal, regulatory and compliance officers practice.

“A couple years is like dog years in these big leadership roles,” said Dow, co-author of a report on the study. “It’s the scale and complexity of the compliance challenges that they have, the technology underpinning the operations of the bank and a move towards more of an operational and process orientation in compliance. It’s not just a regulatory advisory role, which you still see in insurance. It’s much more of an operational role.”

Demographic changes play a role, but greater regulation since the financial crisis means the job has become more important and complex. Chief compliance officers are likelier to sit on the executive committee and have a say in strategic decisions in banking than in other financial services industries. It is a high-pressure role, Dow said.


“The elevation of the role means that we have seen, in banking in particular, that the chief compliance officer is more likely to sit on the executive committee, and that points to the need for people to have these general leadership capabilities,” Dow said.

As compliance has become more important, the largest banks have expanded their compliance staffs, Russell Reynolds said. The firm highlighted Citigroup as an example, where the compliance, risk and other control functions grew to 15% of the bank’s employees at the end of 2018, from 4% in 2008.

While that example is “representative” of the industry more broadly, Dow also said that trend is reversing itself as more technology comes onto the market to help compliance officers in their daily work.

“You do see the early signs of a swing in the other direction,” she said. “If you invest in technology and outsource certain pieces of a compliance function, we might start to see the number of people in compliance come down.”

To read the full article, click here.

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Changing of the guard a frequent occurrence in bank compliance