Dr. Michelle Frasher is Global Head of Compliance & Regulatory Strategy at Silent Eight.
Organizations face challenges when implementing compliance requirements —how to transform broad yet complex laws into operational policies and procedures and ensure that the technologies that support them are suited to those tasks. But compliance is a collaborative effort that demands input from legal, operational and technology teams alike.
This is especially true with the rise of AI-driven solutions, which add another layer of complexity and make cross-functional coordination even more critical. The challenge involves translating law to action and ensuring that human expertise and technology work in sync. To succeed, organizations must foster cross-disciplinary learning and align compliance strategies with both regulatory and business imperatives from day one.
Let’s consider financial crime compliance (FCC). Implementing FCC requirements involves balancing the intricacies of human relationships, managing data and technology—which demands coordinated and collaborative efforts across multiple departments and personalities.
FCC encompasses anti-money laundering (AML), countering the financing of terrorism (CFT), fraud and economic sanctions. It is a high-risk endeavor involving a balance of art and science. National requirements favor the risk-based approach (RBA); this involves identifying, assessing and mitigating the FCC threats posed by customers depending on product, transactions, geographies and a host of other factors proportionate to their likelihood and impact, ensuring resources are allocated where they are most needed.
It’s complicated. So how to bridge the gap between regulations and real-world execution?
The Translation Challenge
Laws are written by policymakers who produce high-level requirements that rarely translate directly to all sectors under its view equally, which means no single industry gets a perfect fit. Finance’s multiple product lines—from retail to wealth management, to broker-dealers and everything in between—will apply these requirements but with different operational approaches.
The result: uncertainty. Regulatory bodies take the law and translate it into sector-specific guidance, sometimes coordinating with other regulatory bodies in similar areas of oversight. But then compliance leaders must interpret that guidance to the operational level to tell their people “on the ground” what to do, and again we end up with more interpretations per organization. It’s not uncommon for regulators to pass around their observations from one institution to another: “Bank A is doing this—have you thought about that too?” Or, for RegTech vendors: “What are your other clients doing?”
Thus, in a world of managing bespoke risk, it’s one thing to interpret a law, but it’s quite another to implement it in a way that is operationally feasible.
Organizations cannot treat compliance as a purely legal exercise. It is a collaborative effort that involves multiple stakeholders. Legal and compliance teams may be equipped to interpret law and design policies and procedures, but they may not be versed in how to integrate current and new technologies into those processes. This can create tension between legal, operational, and technology teams as they try to balance regulatory requirements with practical execution, each of whom may suffer from their own skills gaps vis-à-vis another member of the group.
You’ve Heard It Before: Silos Have Got To Go
Encouraging collaboration across departments to translate law into action is not enough; it must be institutionalized and tied to performance. This requires deliberate steps to ingrain communication and cooperation between teams that are tied to a shared goal. This could involve senior leadership hosting regular inter-departmental meetings and, when appropriate, coordinating KPO/KPIs across their teams, ensuring that management passes the same aims down the chain.
When there’s co-dependence for success, teams are forced to examine priorities and work out differences—not as competing interests but as interconnected parts of a shared objective. This aligns compliance, technology and operations in a way that ensures both regulatory adherence and practical execution.
Vertical and horizontal interactive dialogue, with employees from interrelated departments working together with interdependent performance on certain key goals, enables network thinking, planning and execution. Learning a bit of the other team’s job to the extent that they understand the downstream (or upstream) implications of actions is key. This can include opportunities for employees to shadow other departments and gain certifications in related fields. The goal is to develop a broader understanding of compliance requirements and expectations from multiple views.
The disconnect between compliance leaders and technology teams can be especially detrimental in this new era of digitalization as firms seek AI-enabled solutions. Business leaders often do not engage deeply with the technical details, while IT and data professionals struggle to frame their work in a way that connects to regulatory requirements and operational needs. This is problematic as the effectiveness of AI-enabled technology depends on deep subject matter expertise to guide its application.
By fostering cross-disciplinary learning and ensuring that compliance, legal and technology teams work together from the outset, organizations can build platforms and AI-driven solutions that align with both regulatory mandates and practical business needs—moving forward with iterative improvements informed by all stakeholders.
The Compliance Ecosystem: Education And Collaboration
A collaborative approach helps avoid pitfalls and supports the translation of uncertain legal and regulatory requirements to operational excellence and, ultimately, business efficiency. Compliance leaders are reliant on collective knowledge of their teams and should build matrixed structures that bring together experts from legal, business and technology backgrounds to craft strategies that are both informed and practical.
Ultimately, compliance is about more than just checking boxes; it is a network of interests and expertise. By emphasizing education and collaboration, organizations can turn legal mandates into effective action, utilize the latest technologies and upskill their teams for better performance.
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