Compliance area in significant growth: See the development in major banks
In the years following the financial crisis, compliance departments around the world witnessed a job boom. In some of the largest Danish banks, the number of compliance staff has continued to increase, while, in others, it reached the right level a few years ago.
Compliance and the fight against financial crime have increasingly been given priority by the banks.
The financial crisis and more rigorous rules imposed on the sector have caused banks to hire still more compliance staff, and in some banks, the expansion has sustained to this day.
Other banks report that the number of compliance staff found its own level a few years ago.
"At Sydbank, the compliance function is at an effective level, which has been maintained for the past five years," says Lone Frederiksen, Compliance Area Director at Sydbank, but who will not put a specific figure on how many compliance officers the bank employs today.
A growing appreciation of compliance
She says that the attitude towards the compliance staff has changed considerably as the function has become more important.
"In the beginning, the other employees were more sceptical of those compliance people telling us all sorts of things; was it really necessary? Today, everyone has a much deeper appreciation of the need for compliance and the business to work together to ensure we are doing things right."
According to Lone Frederiksen, compliance officers should listen and show humility if they want a successful collaboration with their colleagues in other parts of the organisation.
"A know-all attitude is an extremely poor approach to collaborating with other people. As a compliance officer, you should not think that because you know which rules apply where you are also an expert on the practical day-to-day operations," she says.
"As a lawyer, I may know endless rules and provisions, but if I watch a share trader’s four screens displaying all sorts of prices and names and abbreviations and I fail to understand what is going on on a particular screen, such knowledge is useless. The legal area must interact closely with the other disciplines."
Expanding compliance departments
At other major Danish banks, the compliance departments are still expanding. Nordea reports that, at the end of 2020, the bank had 196 full-time employees working with compliance across the Nordea Group. By the end of 2022, that number had increased to 239 full-time employees. In addition, 2,600 employees are working exclusively on combatting financial crime. The figures apply to the entire Nordea Group and not just to employees in Denmark.
Danske Bank has also invested heavily in compliance and currently has 3,600 full-time employees working to prevent financial crime. By way of comparison, this figure was 1,500 employees in 2019.
Jyske Bank does not want to specify the exact number of employees working with compliance and financial crime prevention, but informs us by email that:
"Overall, we will say that as the requirements for banks have increased, we have, of course, also continuously assessed and adapted our organisation and tasks; and the number of employees working with compliance has increased in recent years."
No comparison across banks
The figures cannot be compared directly across banks because the organisation and distribution of tasks between different departments vary.
At Spar Nord, most work of the compliance department 10-15 years ago was about ensuring compliance with anti-money laundering legislation. Since then, however, the money laundering area has grown to the extent that a few years ago, the bank chose to separate it from the compliance department and establish an AML function, which today has 26 employees and student assistants. The compliance department has six employees. So says Lone Kock Larsen, head of compliance at Spar Nord.
"The compliance function works with the anti-money laundering rules and monitors our compliance with legislation. We verify that the bank has processes in place to comply with legislation in this area. The AML function, however, works directly with the area; It reports customer relationships and its key task is, together with our financial advisers, to combat money laundering among bank customers," says Lone Kock Larsen.
"The new rules in this area have increased our focus. This means a significant increase in our reporting of customers. 15 years ago, the bank only made a few reports a year. In 2022, we made just under 4,000 reports."