HOUSE, Issue 35

Welcome the latest edition of House. Key themes this month include the rapid surge in data privacy hiring (even before the Facebook story broke!), the increase in AML hiring amongst Australian banks globally and, finally, the increased profile of whistleblowing departments across the globe.

This month’s most notable senior move was at Standard Chartered Bank, where it was announced that Neil Barrie will be leaving as their Global Head of Compliance, with no replacement announced.

Data Privacy Hiring!

With approximately two months left until GDPR comes into effect it’s unsurprising that we have seen a swathe of hiring over the last two quarters. There has been a rush to appoint registered Data Protection Officers with the recurring recruitment theme appearing to be that there is no recurring theme. We have seen compliance officers side stepping into these positions, consultant experts moving in-house, risk and assurance professionals following their own academic interests (or market direction) and technologists leveraging their technical expertise. The disparity in approach to hiring has been mirrored by the variety in where these roles sits within the business. Again, this seems to be dictated by the perceived capacity (for this you could also read level of interest) of Compliance, Risk and Operational departments as seen by their respective heads.

The DPO is now a registered position which suggests there could be an associated level of influence on strategic conversations. It will be interesting to see how much influence this position holds once the infrastructures, policies and required culture shift around data management have been implemented. As we have seen previously, no matter what regulation states, culture is set at board level and filters down from there and like any new division only time will tell.

Whistleblowing - How Far Have We Really Come?

The FCA has made significant steps in recent times to update it’s regulation in order to encourage would-be whistleblowers to step forward. The total number of whistleblowing cases has increased across all industries and the current climate means whistleblowers are more likely to be believed. In addition, the European Parliament have recently delivered a number of recommendations to the European Commission aimed at further protecting whistleblowers. But despite all this the number of overall whistleblowing cases raised by the FCA has fallen from just over 1,300 in 2014, to just under nine hundred by the end of Q3 2017.

A recent Freshfields Bruckhaus Deringer survey suggests that corporate culture is affecting engagement with internal whistleblowing facilities; in fact 55% of managers stated that they or their colleagues would be reluctant to step forward due to concerns over their future career prospects. In fact, in the UK the perceived level of support from seniors managers towards whistleblowers is perceived to have dropped dramatically from 51 to 38% since 2014.

Perhaps as a reflection of these concerns we are seeing an increase in requests for candidates with experience in creating training regimes aimed at regulatory and ethical awareness of the business and whistleblowing ‘champions’ to safeguard the process. The main take- home from this is that increased regulation alone will not ensure a morally proper financial services industry. For Heads of Compliance, now more than ever, it is vital to develop, market and continually reinforce an internal culture of ethical operation and reprisal-free process for genuine whistleblowers.