A Q&A with our Head Of Compliance Michelle McGuire

1. If you were to sum up 2022 in 3 words, what would they be?

I think they would be change, fraud, and people. It was a year of change, particularly regulatory change as there were many legislative developments during the year. I expect this trend to continue into 2023. Lastly, I think the role of the compliance officer changed a significantly and will continue to adapt and change in 2023 given the focus on the use of technology, cyber and operational resilience. 

Instances of fraud rose as phishing attacks continued to increase and received huge media attention, resulting in many regulators and financial institutions increasing fraud awareness campaigns. 

There were many high-profile fraud cases in 2022, one of the most notable being FTX, which has increased focus on cryptocurrencies and exchanges, so I expect to see regulatory change in that space during this year.   

Lastly, I would say people, both in terms of the amount of people that were sadly let go from their jobs but also the lack of talent available in certain areas, like compliance. There is a lot being said about the so called ‘war on talent’ and the compliance sector is not immune to this issue.


2.What are the main things businesses should be trying to achieve in relation to Compliance this year?

If a company is just starting out, the beauty is that they have a blank page from which to build their compliance programme from. Getting structure and programmes right from the outset is fundamentally important as it will set the tone for how you proceed. 

If a company is more mature, given the level of regulatory change we have experienced and continue to experience, a wholesale review of their compliance programme would be beneficial to ensure their existing compliance structure is as effective and efficient as possible. 

A review of this nature means that companies are likely to find ways to gain efficiencies, and direct resources to a more exception-based compliance monitoring programme. Obviously, the use of technology would be instrumental in gaining even greater efficiencies for Companies. 

  1. Compliance grew in importance in 2022, what does 2023 have in store for it?

The importance of the compliance function will continue to grow even more in 2023. Before 2008, it was seen as something of a ‘business prevention unit’. Now, compliance is firmly seen as a division of strategic importance given that it touches every part of a business’s operation. 

A strong compliance culture can be seen as a significant competitive advantage for Firms. 

I think there will continue to be a shift in the compliance officer (CO) role and compliance teams will be divided into specific roles as their influence grows. Perhaps we will see the rise of a niche CO for very specific sections of a business. 


3. If someone reading this is part of a Company does not have their compliance in check yet, what would your advice be? Or where should they start?

Get involved as much as you can. Engage with your fellow employees. Roundtables are a great way of understanding other people’s interpretation of compliance. I would also recommend you use any training available and to upskill as much as possible. 

Be mindful that your decisions impact everyone so it is important to learn about the other teams in your business. 

4. How do companies change compliance from being seen as a cost centre to a business driver? Once they do, what are the benefits they can expect?

The role of the Compliance team has been sacrosanct since the financial crisis of 2008 and continues to become fully immersed in all aspects of a financial services business. The more involved the Compliance division is with the business, the more efficient it likely is. 

In my experience, the Compliance function has become a strategic part of the business development efforts of a regulated financial institution, particularly as customers of the business want to meet the compliance function and understand the role that they play in the business. As I said earlier, there is a view now that the compliance function is a competitive advantage for companies. 

5. Do you see increased interaction between regulators and RegTech solution providers this year? If yes, what will the results be?

Yes, interaction is increasing all the time. I think we will see a delineation between FinTech and RegTech. Some FinTech’s, but not all, are regulated so they must interact more frequently with the regulator. For those that do not hold a regulatory status, there is a tendency for them to proactively engage with their regulator in various formats, depending on the jurisdiction. 

In Ireland, we have the Innovation Hub that the Central Bank uses as their mechanism to engage with the industry. 

There is a focus on companies that are supporting the financial sector to ensure they can really do what they say they can do. There is incredible AI and machine learning out there, but both the industry and regulators need to be comfortable with the power of this technology. 

Regulation is, ultimately, there for a reason. We may sometimes get impatient with the slow adoption of transformative technology, but the downside of incorrectly regulated technology is a clear reminder of why it is there in the first place. 

6. Recessionary times could be seen as an opportunity for fraud if budgets and teams are cut, what is your advice to companies that might be in this situation?

Technology will be key and with skill and staff shortages abound, doing more with less is required. Look at more novel ways to support your business operations. One way is to invest in technology as the volume of data is only going to increase. This will mean an initial outlay, but it will allow you to redirect staff to more important tasks rather than data entry, for example. 

It’s important to note that human subjectivity will always be needed regardless of how much AI or machine learning is used in a business. 

7. Do you think the ‘image’ of cryptocurrencies will recover in 2023?

Crypto will recover but continued adjustment time is needed, especially after the shock of the FTX debacle. When cryptocurrencies first arrived, it really was the Wild West as there was this rush against societal norms and existing financial structures. This went hand in hand with bad actors and fraud and a lot of people were affected by it. 

I think 2023 will be see crypto grow up properly. The average consumer needs to be given peace of mind as consumer protection will be key if it is to become a widely used technology. This will depend on right sized legislation as the existing legislative frameworks are not necessarily fit for purpose.

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