2019 Nasdaq Global Compliance Survey – Inside the Mind of the Compliance Officer

In the 2019 Global Compliance Survey, Nasdaq gathered intelligence on the most pressing developments in surveillance and compliance, while also building on four previous years of rich data. The accrual of results from the five surveys provides a comprehensive profile of year-over-year trends dating back to 2015. Meanwhile, data collected in the 2019 survey provides insight into what compliance officers perceive as being the most current and pressing topics of the past and over the coming 12 to 24 months.

This year’s survey includes responses from 187 professionals and executives responsible for compliance solutions within their firm. In aggregate, these results provide a quantitative assessment of the status of compliance departments across the globe. Respondents were asked quantitative and qualitative questions about their compliance culture, key challenges, compliance spending and resources, trade surveillance, communications monitoring as well as know your customer (KYC) and anti-money laundering (AML) practices.

The comprehensive study of the past five years showcase findings that address topics such as:

  • How are they structuring their teams and spending their budgets?
  • Where are they leveraging specialized technology?
  • What are their biggest regulatory concerns and top compliance drivers?

For example, the percentage of respondents who report that compliance’s core function is upholding and protecting the firm’s reputation was similar to last year: 63% in 2019 versus 67% in 2018. The key takeaway here is that firms understand they are putting the firm at risk by violating regulations Interestingly, this year’s survey shows that concerns over regulatory enforcement actions (i.e., avoiding regulatory fines) have increased significantly. Nearly one-quarter of respondents report that this is compliance’s most important function, representing a shift from previous years’ surveys and a statistically significant increase during the past two years. Back in 2017, firms were caught up in their preparations for specific regulatory mandates such as MiFID II, which went into effect in January 2018. Now that the grace period is over, regulatory scrutiny and enforcement actions are causing greater concern, and more compliance departments may feel compelled to respond proactively.

The rise in the overall importance of concern over regulatory fine avoidance is driven by the sell side with
a similar shift on the corporate and retail bank side. Only 8% of respondents from market infrastructure entities
cite “avoid regulatory fines” as being most important. Similarly, just 13% respondents from the buy side cite
it. It makes sense that upholding the firm’s reputation is most important to buy side fiduciaries, especially because reputational damage often leads to fund withdrawals and potentially the demise of the company. Further, more than 60% of buy side respondents maintain that their investors include compliance practices in the due diligence process.

For more information, please contact Nasdaq for the full report.