A financial services industry in transformation needs to adjust its mindset

The sweep of  new technology in the financial services industry is palpable. On Main Street, the World Economic Forum predicts that RegTech could lead to a flood of new consumer getting their first bank account. On Wall Street, Vikram Pandit and Deutsche Bank CEO John Cryan disagree over whether 30% of jobs are vulnerable, or just “a big number.”

Central to this transformation is the plunge in the cost of storage and computational power. This has allowed firms to turn to software in order to carry out the repetitive processes that make up the backbone of a good compliance department.

Will this mean the end of the Chief Compliance Officer?  The answer is a resounding “no.” Software and data are only as good as the people behind them. An explosion of data and automation won’t lead to a more compliant, efficient without human insight.

But it could mean the end of the CCO as we know it. The CCO of the future will have to apply human insight to a large scale, software-led compliance infrastructure. That means learning the skills of data analytics, document management. This will allow these CCOs to adapt the technology stack to the latest wave of regulations, whether it comes from the SEC, CPFB, FBI or other regulatory agency.

It’s hard to overstate what a change this will represent for many Compliance Officers and teams. Finance and compliance teams are, by their very nature, cautious. At major financial institutions, the individuals leading compliance team graduated college in the dial-up internet era. The fact that new technology exists doesn’t mean that big-budget compliance departments will embrace it, as anyone who has ever tried to convince a team to ditch excel for a cloud-based solution will tell you.

Still, compliance officers find themselves at a key point of conflict for financial services. Increased regulation represents a growing expense base. This, at a time when banks are hungrily seeking out new profit centers to keep their margins healthy. The voice from bank CEOs is clear: technology is crucial for banks to survive and thrive. That’s not something any CCO can ignore.