How to Build an Internal Compliance Team

As organisations attempt to navigate the modern business world’s seemingly ever-evolving web of laws and regulations, the need for effective internal compliance teams has never been more evident. Establishing a robust compliance department at the heart of your organisation is a necessity, and failing to do so carries numerous risks, from reputational damage to financial penalties. By implementing the right strategies, you can build a compliance team with the skills to ensure that your company operates in an ethical and compliant manner. 

In this guide, we’ll take an in-depth look at the core duties of a compliance team and examine the 5 steps organisations should follow to build a strong compliance department structure. 

What is a compliance team?

With trends such as the rise of financial crime, an increasingly complex regulatory landscape, and digital transformation shaping the modern business world, the role of compliance teams cannot be understated. A compliance team, often referred to interchangeably as a compliance department, is responsible for a range of important duties, including ensuring legal adherence, effectively managing risks, and protecting their organisation’s reputation.

Given the growing emphasis on cybersecurity concerns, data security, and evolving privacy regulations, it is unsurprising that many companies are investing significantly in their compliance teams. According to figures compiled by Sprinto, businesses spend an average of 25% of their revenue on compliance costs, while 18% of organisations estimate that more than 50% of their income is allocated to compliance expenditure. 

These statistics reflect a general acknowledgement among businesses that compliance is an area that requires significant funding. Given that compliance departments are instrumental in navigating their companies through the evolving business landscape’s regulatory complexity, there can be little wonder why so many employers value the significance of their compliance teams. 

So, what are the specific roles and responsibilities of a compliance department? 

Let’s take an in-depth look at the various duties compliance teams perform: 

• Regulatory compliance: Implementing strategies to ensure that an organisation adheres to all relevant laws and regulations is a core task for compliance teams. These could include financial regulations, labour laws, environmental laws, and other industry-specific rules. 
• Internal policy compliance: Developing, implementing, and ensuring internal policies and procedures is a key area for compliance teams. These typically cover areas such as anti-money laundering, anti-corruption, and data privacy. 
• Risk assessment: Carrying out risk assessments to identify and address potential compliance risks and vulnerabilities within their business.
• Monitoring and auditing: Routinely monitor and audit the organisation’s activities to ensure compliance with internal policies and external regulations. Compliance teams can accurately detect and address compliance issues by conducting regular audits.
• Reporting: Compliance teams must prepare and submit reports detailing their compliance findings to senior management. These reports allow leadership teams to identify and act on areas where compliance may not be rigorous. 
• Training and education: Providing training and education sessions to educate employees on how to adhere to the latest regulations is a routine task for compliance departments. In doing so, compliance teams can ensure that employees at all levels are aware of the best regulatory practices. 
• Incident response: When incidents of compliance violations occur, it is essential that companies have response plans in place to deal with them effectively. Compliance teams are tasked with drawing up incident response plans that are able to manage compliance breaches promptly. 
• Ethical culture promotion: Compliance teams need to take an active role in promoting a culture of ethics and compliance. They should go the extra mile to emphasise the significance of ethical behaviour and adherence to the latest rules and regulations.

The importance of these roles and responsibilities cannot be understated. As such, companies must work diligently to ensure that they recruit the best and brightest candidates for their compliance jobs. If you’d like to discover more about how your business can attract and retain top compliance professionals, we encourage you to read our ‘How to Develop a Successful Compliance Recruitment Strategy’ guide.  

5 steps for Building Your Compliance Department Structure

As we alluded to earlier, current challenges, such as the ever-present threat of cybercrime and an evolving regulatory landscape, are forcing companies to place a much greater emphasis on compliance. Building an effective compliance team is not merely a regulatory requirement, it is a forward-thinking investment that provides organisations with a range of key advantages. These include a reduced risk of financial losses due to costly fines, enhanced operational efficiency, and improved decision-making. 

Considering these key benefits, it is no wonder that 99% of companies plan to achieve continuous compliance over the next five years. This begs a very important question: How exactly can businesses build strong and efficient compliance departments? 

In this section, we’ll explore the 5 steps your organisation should put into action to ensure that your compliance team is as effective as possible: 

1. Determine the objectives of your compliance team structure

Before you start recruiting talent for your internal compliance team, developing a clear understanding of its purpose and objectives is vital. Accurately determining your compliance team’s goals requires plenty of planning and strategic thought, and you must ensure that the objectives you decide on align with your organisation’s overall mission, values, and regulatory obligations. 

Let’s examine the various strategies for determining the objectives of your compliance team: 

Evaluate your company’s compliance requirements

An appropriate first step is to take stock of your organisation’s operational landscape. Be sure to take note of the numerous laws, regulations, and industry benchmarks that directly affect your business. This can include local, national, and international regulations, so it is crucial for you to conduct deep research into the guidelines your company is bound by. Gaining this foundational understanding will ensure that your compliance department is specifically tailored to address the requirements and nuances of your organisation. 

Identify and assess risks 

From the USA’s tech sector to the UK’s renewable energy space, every country and region has its own unique compliance requirements and risks. By accurately identifying these possible pitfalls at an early stage, you’ll be well-equipped to make sure that your compliance team has the necessary tools and strategies that enable them to perform their duties effectively. Whether it's regulatory changes, industry-specific challenges, or region-specific laws, a proactive approach is key for safeguarding your business from potential challenges. 

Define team roles and responsibilities

The most robust compliance teams are diverse in their skills and expertise, so ensuring that your department comprises professionals with in-depth industry and regulatory knowledge is paramount. With an acute awareness of your organisation’s compliance needs and potential regulatory pitfalls, you need to clearly define team roles and responsibilities. This could include: 

• Compliance managers: Compliance managers are typically tasked with overseeing the entire compliance function, ensuring alignment with organisational objectives.
• Analysts: Identifying potential compliance issues by analysing data, trends, and unusual patterns is the primary focus for compliance analysts. 
• Auditors: Conducting frequent reviews and audits of compliance measures is instrumental in ensuring that operational efficiency, and this is where auditors can be of service. 
• Legal Experts: Employing legal experts to provide insights into legal interpretations and implications can greatly enhance your compliance department. 
• Specialists: Hiring individuals with expertise in niche areas like data privacy, anti-money laundering, and ethics would greatly help your compliance team. Their specialised knowledge ensures that the organisation is not only compliant but also ahead of the curve in evolving areas of concern.

Determining the objectives of your compliance team structure can be a long-winded, complex process that requires a deep understanding of business goals and relevant compliance legislation. Yet, by laying a solid foundation and guaranteeing alignment with business goals, your company has a much greater chance of building a compliance department that meets regulatory mandates and boosts your brand’s reputation. 

2. Draw up your internal compliance policy 

When you have outlined the goals and purpose of your compliance department, the next step is to draw up your own internal compliance policy. Establishing a well-defined compliance framework is instrumental to the success of your compliance team, and without it, your organisation will be vulnerable to a range of risks, including financial penalties, disruptions to operations, and even negative publicity. 

But perhaps the most damaging effect of failing to implement a coherent compliance policy is that your team will likely lack direction. With a detailed list of compliance policies for guidance, your compliance team will be able to guarantee that your company meets its internal and external compliance obligations. For many organisations, this is easier said than done, with 41% of companies citing refining and updating internal policies as a key compliance challenge. 

There are various tips that can help organisations to establish a robust internal compliance policy, including: 

• Conduct research into the relevant laws and regulations that apply to your sector and location 
• Outline procedures for implementing and evaluating compliance, ensuring that they can be modified to suit different scenarios 
• Frequently assess the results of your compliance policy by carrying out audits, gathering feedback from employees, and examining reports 
• Seek input from key stakeholders during the policy development stage, especially from experts in your company’s legal, HR, and management departments 

3. Start recruiting for your compliance team 

The next step on our list is to start recruiting exceptional talent for your compliance team. No matter how thorough and foolproof your planning is, building an outstanding compliance department can only be achieved by recruiting high-quality candidates. Once you have created a list of roles that will feature in your compliance department structure, you’ll be ready to put your recruitment plan into motion. 

Attracting and retaining the brightest candidates in a market where demand outstrips supply is no easy feat. In fact, analysis shows that compliance jobs are currently soaring, with one report revealing that hiring for compliance roles is up 98.9% year on year. However, by adopting the right hiring methods, your organisation can emerge as an appealing option for ambitious compliance professionals looking for their next job opportunity. 

Here are our top tips for recruiting high-calibre candidates in the compliance sector: 

• Strengthen employer brand: Establishing a unique and recognisable employer brand is a surefire way to pique the interest of the most outstanding applicants. Companies can bolster their brand identities in several ways, including sharing success stories, employee testimonials, and awards related to achievements within the compliance sector. 
• Define skill sets: Given the varied nature of compliance roles, hiring professionals with diverse expertise is imperative. Be sure to seek candidates proficient in various areas, including compliance management, regulatory affairs, and legal practices. You should also bear in mind that industry-specific experience can offer invaluable insights tailored to your organisation's unique challenges, so keeping an eye out for that is key. 
• Conduct a rigorous selection process: Implementing a stringent recruitment process will ensure that you end up with the most capable candidates. This should involve comprehensive interviews, thorough reference checks, and potentially even skill assessments. Remember, your aim should be to ensure that every hire meets the technical requirements and aligns with the organisation's culture. 
• Leverage compliance recruitment agencies: Partnering with recruitment companies that specialise in connecting top talent with compliance jobs can be an effective hiring method, particularly for organisations that don’t have access to extensive talent pools. Due to their ongoing relationships with active and passive candidates, recruitment firms usually boast vast talent networks that their clients can tap into.

4. Give your compliance team the tools and technology they need 

Assembling a team of top-quality professionals for your compliance department is an important achievement; however, providing them with the tools and technology they need to perform their duties to the highest possible standard is just as crucial. Failing to empower them with state-of-the-art equipment risks your organisation losing its competitive edge, and employee morale may deteriorate as a result. 

Investing in state-of-the-art technology will not only encourage your hires to remain a part of your compliance team for the long term, it will also enable them to meet your regulatory obligations more efficiently. According to a survey conducted by Accenture into the role of technology in the compliance sector, 93% of respondents agreed that innovative technologies like AI and cloud computing make compliance easier. 

Let’s delve into the various steps your business should take to make sure that your compliance department has access to the most cutting-edge tech: 

• Assess current needs: Conduct an in-depth assessment of your compliance team’s current workflows and challenges, identifying areas where technology updates are required. This evaluation will allow you to make informed decisions about which areas would benefit from technology investments. 
• Invest in compliance management software: Acquiring a dedicated compliance management software designed to automate tasks, generate reports, and track compliance obligations would be a smart tech investment. With special features like document management and audit trails, compliance management software can support compliance teams in carrying out their tasks more effectively. 
• Prioritise data security and privacy tools: There is a growing emphasis on data security and protection at the moment, and compliance departments need state-of-the-art data security and privacy tools to ensure that sensitive compliance information is processed with the utmost confidentiality.  
• Regularly update technology and tools where necessary: Staying up to date with the latest trends and developments in compliance technology is key, as it will help you better understand the sort of tools your compliance department could benefit from. 
• Provide training on how to utilise tools: Offering training sessions on the best practices for leveraging new compliance tools is vital for ensuring that your team is well-versed in the tech you’ve invested in. It will also show them that you are committed to the success of their department.

5. Build a culture of compliance within your business

Assembling an effective compliance team with exceptional talent in key roles is certainly a commendable achievement, but the only way to guarantee long-term compliance success is to create a culture of compliance. Cultivating a workplace environment that champions compliance is not a task that can be achieved overnight. On the contrary, it is an ongoing process that requires commitment and effort from everyone in an organisation, whether it be frontline employees or executives. 

Here are the key actions you should take to create a culture of compliance: 

• Ensure that leaders act as role models by setting a high ethical standard for employees
• Create an environment where employees feel comfortable enough to speak up
• Acknowledge and reward employees who follow your internal compliance policies
• Invest in regular compliance training to keep staff informed about the latest internal and external policies and regulations 
• Utilise innovative technology tools to detect potential risks and track compliance activities 

Fostering such a culture will not only inspire trust in stakeholders and external regulators, but it will also help your company mitigate the financial, reputational, and operational risks associated with compliance violations. With research showing that 95% of businesses have built or are attempting to establish a compliance culture, it is clear that compliance culture is becoming a prevalent theme in the majority of organisations. 

By following the tips outlined in this section, your company will be well-positioned to avoid legal risks and build a more successful, ethical, and compliant organisation. 

Our final thoughts on building an internal compliance team 

Building a strong and effective compliance department is a strategic imperative for modern businesses navigating a complex regulatory landscape. The roles and responsibilities of a compliance team, ranging from regulatory adherence to risk assessment and incident response, highlight its importance in safeguarding an organisation's reputation and financial well-being.

The guide outlines a comprehensive five-step approach to establishing a robust compliance department structure. From determining the objectives of your compliance department to establishing a culture of compliance, we’ve discussed five strategies that can help you build an effective compliance team. 

In the modern business environment, where compliance is increasingly prioritised, investing in a strong compliance department is not just a regulatory necessity but a forward-thinking strategy that can be a key contributor to achieving sustained success. 

For more information on business compliance, discover our guide on business compliance: our guide for small companies. Alternatively, scroll below to see how we can connect you with outstanding candidates who can support your company in fostering a culture of compliance and ethical behaviour. 

Seeking support from a financial crime recruitment agency?

If you’re part of a growing business looking for anti-money laundering experts to protect you from the vulnerabilities associated with compliance and financial crime, we can help. Our unrivalled strategic solutions give us the edge over other financial crime recruitment agencies. We’ll help you develop a solid hiring strategy, allowing you to connect with the best talent capable of safeguarding the future of your brand.

Contact us today to find out how we can support your specific compliance and financial crime recruitment needs.