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The first known compliance breach and regulation violation is that of Adam eating the forbidden apple. Since then, multiple compliance breaches have occurred, with challenging to catastrophic outcomes. Banks and financial services are more vulnerable to the effect of breaches and their consequences, given that they deal in the financial well-being of individuals and the economy. It is slowly dawning on the stakeholders of the industry that proactive management of compliance and the associated risks will be a business multiplier.

Compliance risk management, as a distinct subject, in banks and financial services is young and evolving. Complying with authority, in a narrow sense, has been in place for ages now, but the many dimensions and nuances added due to the exponential increase in the complexity of the financial world have greatly expanded its scope and have brought it to center stage. The creation and elevation of the role of chief compliance officer – the journey from a dusty table in a corner of the office to a place at the C level executives table in the boardroom – speaks volumes about this transition. However, the systemic integration of compliance into the business and strategic fabric of the organization is yet to happen.

In the face of an anemic global recovery and lack of alignment of business models with active compliance, this field justly demands that it be treated as a discipline in its own right – more so now than ever. There is insufficient literature and a lack of comprehensive references in compliance risk management. This book is intended to address that gap.

This book seeks to provide an essential toolkit for navigating the compliance universe, aligning itself with and enhancing the fundamental business objectives of value creation, preservation, and enhancement of organizations. It provides a broad view of managing compliance and compliance risk holistically in the financial services space. Multiple facets of the subject and their interrelationships are explored. Important aspects covered are the use of active compliance management as a strategic tool, cost benefits of active compliance management, and connections with other traditional and evolving risk disciplines.

The purpose is to rise above mere evangelizing and move into the realm of operationalizing compliance in the real world. The three areas of focus are: (1) detailing the how of compliance, including discussions on compliance framework and operationalizing compliance; (2) the hitherto largely underexplored life cycle of compliance risk management from risk definition to regulatory dialogue; and (3) real-life challenges in the world of compliance such as areas of conflict, myths, gray/overlap areas, as well as some innovative yet practical strategies that practitioners have developed to meet these challenges. Templates, tools, and a framework to manage compliance in a structured way will help readers to jump-start or refine compliance initiatives in their organizations. Instead of the traditional foreword by one expert, this book is peppered with five Practitioner's Notes – thoughts and views on the subject of compliance by industry experts, adding to the real-world perspectives that the book brings to the table.

Saloni Ramakrishna