In these years of prodigious change that have shifted the way in which global companies operate, Chief Ethics & Compliance Officers (CCOs) are taking the lead as change agents advancing their functions, operations and analytics from responsive to proactive. They are anticipating shifts in regulatory and stakeholder expectations and preventing exposures before they occur by adopting new approaches and technologies that help their companies stay at the forefront of change.
The KPMG 2021 CCO Survey: Sharing client perspectives on compliance imperatives explores how CCOs across multiple industries are adapting to these global trends and evolving risks.
Enhance:Respondents were overwhelmingly clear that automation and technology would be integral to their compliance efforts (67 percent). This was the respondents’ overall top activity that they will focus on enhancing in the coming years; in contrast, CCOs responding to the KPMG 2019 CCO Survey selected “monitoring and testing” and “investigations” as their top activities to enhance.
Refine: Across all industries, the largest percentage of respondents indicated that their top obligation to refine in the coming years was industry-specific regulations (39 percent), which is a significant increase from our 2019 CCO Survey. Other top obligations that CCOs are focused on refining include customer protection (35 percent) and cyber/information protection (28 percent).
Investments in compliance
Businesses have been aware for some time of the need to invest in automation and technology in order to enhance and monitor the effectiveness of internal processes and procedures, predict future outcomes, and enable better connectivity with third parties and customers.
Budget: Compliance departments appear to be receiving support in their technology journeys from the broader organization. Nearly half of respondents (49 percent) expect their overall ethics and compliance department budgets to increase year-over-year, while the vast majority of respondents (more than 75 percent) expect their technology budgets specifically to increase.
Metrics: With the budget in place to increase the use of technology and automation in the compliance department, respondents overwhelmingly identified “data analytics” as both the greatest opportunity and the greatest priority for automation. Importantly, data analytics can be a critical input to decision makers and can greatly enhance the messaging and readability of internal and external reporting. In the report, you’ll learn more about metrics commonly used to measure compliance effectiveness.
Compliance in the new reality
CCOs recognize that not only do they need to maintain traditional compliance skills and expertise but they must also enhance their skill sets in these emerging areas with subject matter expertise. CCOs identified data analytics (54 percent) as the top area in which they need to supplement the existing compliance team with subject matter expertise.
The global pandemic has also had a significant impact on the compliance environment. In particular, CCOs have cited a change in the physical location of the compliance department resulting from the pandemic. In the report, you’ll learn how CCOs are addressing this new work environment.
Read the full survey from KPMG at https://advisory.kpmg.us/articles/2021/cco-survey-2021-gated.html