NFU Blog

How to cope with compliance?

On January 31, NFU hosted a half-day conference in Brussels to mark the publication of a new study on the effects of regulatory requirements on Nordic finance employees; Coping with Compliance. The result shows that the pressure in the sector is increasing, as employees are experiencing growing workload and rising stress levels. It is a worrying development. At NFU, we have some thoughts on how to make sure that employees can cope with compliance and at the same time ensure a stable and sustainable financial sector.

The study shows that the time-demanding compliance tasks has been put on top of employees’ other work, without no or very little adjustment of performance goals and demands. As regulatory requirements increase, the over-all workload needs to be adjusted accordingly to make sure that employees have sufficient time and resources to both comply with regulation and provide customers with good financial advice. This is essentially a question of good governance, throughout the company and at all levels. In addition to focus on rule compliance, as Philippe Pellé, Deputy Head of unit at DG Fisma/EU Commission, said at the half-day conference;

“Banks need to invest in company culture and behaviour too”

It is apparent that the employee perspective has been missing in the EU legislative process. The regulatory reform after the financial crisis was much needed and well-intended, but too little thought seems to have been put on how the rules would play out in reality. Almost half of the respondents in the NFU study says that employees experience a conflict of interest between providing good customer service and following rules and procedures. Many also say that documentation is done at the cost of meeting with and advising customers.

One can ask if this really is the best for the employees or the consumers, but also if the rules live up to the original legislative intent; to improve the quality of advice to consumers. That is why the employee perspective need to be taken in to account when designing and implementing financial regulation. To achieve this, trade unions must be strengthened as a stakeholder throughout the whole EU legislative process. The employee perspective must be taken into account when reviewing existing and developing new legislation, also in the EU’s impact assessments.

Financial legislation should avoid excessive complexity and strive to create a transparent and stable framework that supports quality financial advice and sustainable sectors. This is not the case today, where compliance is considered burdensome, time-consuming and complex. As expressed by one of the respondents in the NFU study;

“It is good to have rules and regulation, but they must be simplified to be easy to implement in our everyday work”

The cumulative effects of financial regulation should be assessed to make sure that the framework is fit for purpose. This is also essential from a consumer’s point of view, as highlighted by Monique Goyens, Secretary General at BEUC, at the January conference;

“The regulatory reform after the financial crisis has not fundamentally tackled the problems consumers face”

The half-day conference in Brussels and launch of the report was only the first step for NFU. We will now continue to work with the issue and discuss the way forward, by raising the employee perspective to legislators’, employers and other stakeholders at European level. Our aim is to create a better balance for finance employees, making sure that their perspective is “top of mind” for both legislators and management when working with legislation. By doing so, I am convinced that we can cope with compliance and achieve a well-regulated sector that supports finance employees’ wellbeing, quality financial advice and a sustainable financial system for the future.

The full report available is here and the NFU Policy Paper here.

Annika Stenström

Policy Advisor
Email: ast@nordicfinancialunions.org
Phone: +46 704 147 770
Twitter: @AnnikaStenstrm

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