From Bird Flu to Basel 2: The New Scope of Compliance

Article excerpt

Alan Horton-Bentley, director of worldwide industry marketing, financial services, FileNet, Costa Mesa, Calif., is a compliance expert who offers candid takes on the evolving industry and discipline.

Once a CEO of Xcel Banking Systems, he became president in the early Nineties of Regulatory Compliance Associates, or RegCom, Geneva, Ill., which is stilt in the business of translating regulations, as well as offering succinct guidance on how to stay compliant.

"In the days when there was little emphasis on compliance," says Horton-Bentley, "it was something mysterious, and something done only periodically."

But as compliance has become more sophisticated, Horton-Bentley explains why banks are pledging dollars now.

There seems to be a new emphasis on, and respect for, compliance officers. Why now?

Compliance is respected because first, the demands are increasing. Senior executives have a newfound appreciation of the detail and interpretation involved in bringing a bank into compliance. It's also a media hot topic right now, perhaps due to the Patriot Act and its relation to Homeland Security and security issues generally. Anyone who can devise a solution, or a series of applications, or declare the integrity of the environment itself is worthy of respect and dollars, however grudgingly spent--and banks are spending.

It's interesting, because there have always been strict regulations.

That's true. Compliance has always been with us, it's just more visible now.

As I see it, perception of compliance changed around the time of bank modernization and the repeat of Glass Steagall. It's timing as a subject of interest also coincided with the explosion of the internet, when dictates around the controlling technology exploded with it.

Ever since automation got introduced into banking in a broader way [than transactional systems], regulators have been seeking to corral in the toots and techniques used by today's banks.

Why is compliance so difficult?

There's a lot of interpretation around regulation. I think there's a misconception about compliance among certain non-practitioners: that it is a concrete discipline like mathematics, and like math, it offers a right answer. Quite to the contrary, interpretation is required. Compliance experts have to work hard to derive a succinct set of key objectives and deliver a compliance project.

Then, it has to be said, reading compliance-related documents is like reading regal writing. It's a bit dry and very dense. …