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What we've got here is a failure to communicate

By Blair Rugh 10 Oct 2017

The above is a famous quote from the Paul Newman movie, Cool Hand Luke. In notoriety it ranks somewhat below Rhett Butler's, "Frankly Scarlet I don't give a damn" but from the standpoint of a financial institution's compliance program, it is number one. Communication is one of the hallmarks of a successful compliance program and without it you are doomed to fail.


Virtually everything that a financial institution or its employees say or do, or how they say or do it is governed by some regulation. Therefore, it is mandatory from a compliance standpoint that the compliance officer in a financial institution knows what is being said and done. It is the responsibility of the compliance officer to establish and maintain open lines of communication with all of the departments in the financial institution so that the compliance officer knows what is being considered. It is the compliance officer's job to sell himself or herself to the heads of all of the other departments so that they understand that the compliance function is there for their benefit, not as a road block to what they want to accomplish.


A compliance officer needs to understand that they are viewed somewhat the same as a police officer. They may be respected but not universally loved. If you are driving and there is a police car behind you, you make sure that you come to a complete stop at all stop signs and you don't exceed the speed limit. If the police car is not there, maybe not so much. It is the compliance officer's job to convince the other department heads and institution employees that they want to obey the rules because there may be another police officer parked in the shadows.


It is the compliance officer's task to develop a feeling of camaraderie with the other department heads so that they know that advising the compliance officer early on of their plans and involving the compliance officer in the planning process is to their benefit. One of the elements of this is for the compliance officer to avoid becoming Dr. Death. You can't be the person who waits for one of your fellow employees to fall into a hole and then shovel dirt on top of them. You have to be aware of where they are walking so that you can say, "Watch out for the hole." When you are involved in a department's planning and it wants to do something that is outside of the rules, it's not just your job to say, "You can't do that." After saying why they can't do what they want to do exactly the way that they want to do it, it's your job to give them two or three compliant alternatives to accomplish what they are trying to accomplish.


Communication is a two way street; it is the job of the compliance officer to initiate that communication. Make sure that all of the employees of the institution have a good understanding of the regulations that govern their positions and educate them early on of any changes or additions to those regulations. Make sure that they understand that you are there to help and not to hinder. Let them know that if they have a question you want them to ask it. Let them know that if they have an idea for a new product or service they are welcome to run it by you before they put too much work into it. Also, let them know that it is your job to guide them through the labyrinth of rules and regulations successfully.


Much success of communication is basic human relations. Make yourself available and approachable; when another department involves you in its planning, thank them and let them know that you appreciate it. If you work on your institution's internal communications one of the results will be a better and easier compliant result.

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