A new survey finds that in the past 12 months, 49% of compliance officers have taken action against an employee for failure to follow the firm’s code of ethics, with 11% of those actions resulting in termination.
The survey, from Compliance Solutions at Charles Schwab, finds that on average, compliance officers spend approximately 11 hours per week monitoring and surveilling their employees’ personal brokerage accounts. Half of them are monitoring social media.
However, only 51% of compliance professionals are very confident that their employee monitoring policies are effective in achieving desired results.
Manual Labors
About half (54%) of compliance professionals are still using some form of manual compliance surveillance, and 21% say they are primarily dependent on a manual review of paper statements for their employee personal trading account surveillance. Moreover, 34% say they spend a disproportionate amount of time collecting data rather than analyzing it.
On the other hand, 80% of those who utilize automated compliance surveillance are confident in their technological solutions.
As for what they see as the biggest challenge:
50% — Increasing responsibility for non-traditional compliance activities like Information/Cyber Security or third party vendor reviews
31% — Difficulty keeping abreast of recent changes to laws and regulations
31% — Training employees on compliance procedures
25% — Keeping employees informed on compliance requirements
17% — Being included in the corporate decision process
16% — Finding talent
15% — Insufficient budget
4% — Other
2% — None of the above
Looking Ahead
As for their highest priority over the next six to 18 months:
43% — Testing and auditing
39% — Streamlining compliance programs
38% — Monitoring and reporting
Survey Methodology
From Aug. 12-Aug. 26, Penn Schoen Berland (PSB) conducted 134 online surveys among what they called compliance influencers, which consist of individuals who work in financial services or at a firm affiliated with money management who have influence over decisions regarding compliance issues within their organization. Interviews came from both the Schwab-managed database and from a PSB-provided panel sample.
