The upside …
By establishing transparent career paths, FCC functions will benefit in several ways, including:
- Sending a clear message to existing and prospective employees that the company is invested in career advancement, which will encourage employees to apply for roles and to stay.
- Helping to deploy the existing workforce to areas in most need, which optimizes the company’s investment in human capital. For example, redeployment of resources to address temporary issues such as backlogs in name screening or KYC refresh volumes. Where this kind of cross-functional mobility takes place, it is more effective if there is a solid foundation of talent infrastructure.
- Helping to reduce the likelihood of attrition. The cost of replacing employees is significant in terms of recruitment expense and the investment of time needed to interview candidates and onboard new joiners. This is particularly so in a remote work environment in which cultural immersion, networking and real-time coaching opportunities can be limited.
We are too big — and want to change
Over the last two decades, since the USA PATRIOT Act came into effect, many FCC organizations have grown quickly. This growth has been fueled by an increased number of regulations, which require more people to interpret and implement. Additionally, the number of commercial and retail bank accounts has ballooned, leading to increased volumes of client onboarding and transaction reviews. This has resulted in some reactive hiring practices to meet immediate needs - without necessarily focusing on the longer-term structure of the organization.
Organizational structures require careful planning, and there are practical boundaries around the shape of an FCC organization. Not everyone can move up in the organization after a prescribed amount of time, as this would result in an imbalanced, top-heavy structure. As such, it is important to consider the career path options within an organizational structure as it is designed. For example, if spans and layers are wide (i.e., each manager has a large number of direct reports in a relatively flat structure), upward mobility opportunities could be limited. In that situation, consideration of lateral or “jungle-gym” (i.e., diagonal) role transitions may be required. Where this is the case, it may be appropriate to determine career paths based on generalist skills such as policy design, risk identification or investigations instead of highly specialized skills such as knowledge of specific regulations or laws. In reverse, where spans and layers are narrow (i.e., each manager has a small number of direct reports in a hierarchical structure), upward mobility opportunities may be more plentiful, with career paths organized around a narrower set of skills.
To offset some of the headcount growth within FCC organizations, banks have become more data-driven through the use of automation and analytics. As teams have grown, the need to find efficiencies as well as focus high-cost resources on more complex tasks has led to significant automation of previously manual or time-consuming tasks. For example, the use of robotic process automation (RPA) to web crawl when doing customer onboarding due diligence or investigating unusual customer behavior has increased. Another option to drive efficiency and limit the involvement of highly skilled resources in repetitive tasks is to outsource those tasks, such as first-level transaction monitoring alert reviews, periodic KYC refreshes and name-screening alerts, to a third party under a managed services arrangement.
The focus on automation is likely to continue, and digital acumen, technological aptitude and data synthesis are becoming baseline skills for the FCC professional of the future. Employees with strong data presentation skills are valuable as the consumption of data has grown exponentially. The ability to analyze, synthesize and compellingly present data to a variety of audiences, who are often senior, has become an essential skill. This is particularly true when we consider the expectations of chief compliance officers, risk committees and the business (which own FCC risk) to be up to date with real-time information to highlight the FCC risks within the organization. From a career-path perspective, factoring these digital expectations into roles as they operate today and into the future and facilitating the necessary upskilling will be a critical requirement within an FCC organization.