8 Top Trends and Insights in Compliance Recruitment in 2023

5 min

In 2023, compliance recruitment and the compliance industry as a whole have seen various cha...

In 2023, compliance recruitment and the compliance industry as a whole have seen various changes. Many of these involve the sector's digitalisation, introducing new regulations and sanctions off the back of the Russia-Ukraine war, the continued focus on environmental, social and governance strategies, and a need for businesses to conduct more thorough due diligence.

In our compliance trends 2023 guide, we will delve into 8 of these insights to give you an understanding of what to expect from the industry this year and in the future. 

Here’s what we will cover in this guide.

  1. Understand the latest compliance sanctions
  2. Crypto regulation is a compliance priority
  3. The growth of digital transformation and third-party risk
  4. Artificial Intelligence and RegTech continue to evolve
  5. Cybercrime remains a significant challenge
  6. Due diligence is a major factor in compliance
  7. ESG should be a focus within compliance recruitment
  8. Compliance specialists are in high demand

1. Understand the latest compliance sanctions

Having an understanding of the latest sanctions that could result in potential problems for your business if not abided by is essential for any business owner.

For example, the conflict between Russia and Ukraine has seen a new wave of sanctions sweep the globe relating to restrictions on imports and exports of certain goods like oil to partnerships with banks. 

Over 12,900 designations have been posed against Russia, 75% of which are against individuals and 24% targeted at organisations, with more expected to follow. Globally, the US has imposed the highest number of these sanctions against Russia, with over 3,000 restrictions in place.  

With restrictions like the ones surrounding Russia a clear example of how sanctions are showing no indications of slowing down in 2023, businesses must understand the various sanctions to ensure they avoid partnering or providing their products or services to individuals and entities with restrictions imposed on them. Failing to understand and abide by these restrictions could result in financial penalties or freezes on certain assets. 

2.Crypto regulation is a compliance priority

Cryptocurrency is still a talking point in 2023 and will continue to be going forward from a financial compliance standpoint. Governments are increasingly seeking to lay their stance on improving regulation within this predominantly unregulated space. 

In 2022, hackers stole $4.3 billion worth of cryptocurrency, prompting countries to impose new regulations on the market. The EU Parliament Markets in Crypto Assets (MiCA) bill was approved in April 2023 and is expected to be made law in 2024, whilst in the US, the Lummis-Gillibrand bill saw a second instalment in July 2023, both of which are aiming to help regulate the crypto-asset activities and protect against financial crimes like crypto-based money laundering. 

Additionally, a push for cryptocurrency exchanges to follow anti-money laundering assessments and regulations like Know Your Customer could become more of a focus in 2023 and beyond. 

We discuss more corporate compliance insights like cryptocurrency regulations in our guide on 5 of the biggest financial crime trends 2023 you should know.

3. The growth of digital transformation and third-party risk

Of course, the shift towards digitalisation was boosted by the pandemic. However, in 2023, there’s expected to be a continued increase in organisations within the compliance industry jumping on the digital transformation bandwagon. 

From automating tasks like reporting, data entry and document reviews to enhancing internal collaboration, training and data analysis to identify risks of non-compliance, the growth of digital transformation will be adopted by more compliance-driven companies seeking a more streamlined approach to managing risk compliance.

Compliance industry trends such as digital transformation go hand-in-hand with the growth of businesses utilising the services of third parties to help with their digitisation efforts. However, the growing reliance on third parties has the potential for further risks that could damage your business from a financial and reputational viewpoint. These third-party risks could be anything from data privacy and security breaches to bribery. 

The growth of third-party risks in 2023 has seen amendments made to the UK's Worker Protection (Amendment of Equality Act 2010) Bill, which deems employers liable for any third-party harassment made to their employees, be it a supplier, client, or member of the public.   

When it comes to taking measures to combat third-party risks, White & Cases and KPMG's 2023 Global compliance risk benchmarking survey revealed that 57% of respondents said their compliance and ethics teams conduct third-party compliance due diligence. 

Continuing into 2023 and beyond, compliance businesses must be agile as they move forward with their digital transformation and partnership with third parties by conducting frequent third-party risk assessments and monitoring to ensure they protect themselves and their stakeholders. 

4. Artificial Intelligence and RegTech continue to evolve 

As an established compliance recruitment agency, we recognise how Artificial Intelligence (AI) and Regulatory Technology (RegTech) continue to evolve and shape how organisations operate within the compliance industry. 

In 2023, McKinsey reported that AI has the potential to generate an annual economic surplus of over $4 trillion for the global economy. Additionally, by 2025, the global RegTech market size could be worth over $55 billion if estimations from Grand View Research come to fruition.

Technological advancements like AI and RegTech will continue to be beneficial to compliance in 2023, automating processes like:

  • Screening transactions for money laundering, fraud and financial crimes
  • Managing financial compliance regulations
  • Reporting on compliance data
  • Data analysis to mitigate risks relating to non-compliance
  • Identifying risks in real-time

AI and RegTech are still evolving, but they have the potential to revolutionise the compliance industry. By automating compliance processes, identifying and mitigating risks, and complying with regulations in real-time, AI and RegTech can help businesses improve their compliance posture and reduce their risk of regulatory penalties.

Although the evolution of AI and RegTech will benefit organisations within the compliance industry and further afield, these technologies are in their relative infancy, meaning compliance specialists will have to pay close attention to the ethical implications surrounding these advancements. Greater governance surrounding AI technologies is certainly a concern within the compliance industry and is something we expect to see in 2023 and the coming years. 

5. Cybercrime remains a significant challenge

Undoubtedly, cybercrime is arguably the most worrying compliance industry trend of 2023. In 2022, there was a 42% global increase in cyber-attacks, with the average global data breach cost reaching over $4 million. 

Cybercrime as an industry is expected to grow from over $200 billion in 2023 to more than $500 billion by 2030, showing no signs of slowing down. The criminal space is becoming more sophisticated by the year, with cybercrime-as-a-service models becoming the norm to professionalise the industry, allowing wannabe hackers the opportunity to learn the skills and adopt the tools to commit cyber-attacks.

All businesses are vulnerable to cyber-attacks. Even a compliance recruitment agency like us faces challenges against the growth of online threats, from phishing to malware to ransomware attacks. When it comes to the types of organisations affected by cybercrime, the financial services sector is one of the most targeted, according to a report by Akamai. Their findings revealed that 80% of hackers target customers of firms within the financial service space. 

Companies within the compliance industry must scale their compliance strategies and design up-to-date cyber security frameworks to help businesses and their customers feel secure when utilising operating in the online space. Additionally, compliance specialists will grow in demand as brands realise the greater potential of online threats posed against their business, but these specialists must be equipped with the expertise to stay ahead of the counter expertise of cyber criminals. 

6. Due diligence is a major factor in compliance

Due diligence is a significant insight we want to highlight in our compliance trends 2023 guide. This trend is especially significant in today’s modern world, where digital transformation is at the forefront. As AI continues to evolve, cybercrime remains a considerable challenge, and various global regulations and sanctions are being established and amended; it has never been more crucial for businesses to conduct thorough due diligence. 

 One significant example of how due diligence is a major factor in compliance comes from Germany’s Supply Chain Due Diligence Act. The act, which came into effect in January 2023, requires German businesses with over 3,000 employees to adhere to specific environmental and human rights provisions related to their supply chains. 

This particular act aims to minimise the risks of businesses associated with human rights factors such as modern slavery and environmental impacts such as the export of hazardous waste. By 2024, the act will come into effect for German organisations with 1,000 employees, with the likes of the Netherlands and Switzerland also drafting their own version of supply chain due diligence.

As organisations continue to work with new supply chain third-party vendors and become more digitalised, a need for enhanced scrutiny and a holistic approach to due diligence is a must to avoid breaching certain regulations. 

Below are some of the key aspects of due diligence that businesses should consider to remain compliant in 2023.

  • Identify all laws and regulations applicable to the business 
  • Conduct risk assessments on internal and third-party compliance processes 
  • Develop or optimise a compliance strategy
  • Implement a compliance plan
  • Monitor and enforce the compliance strategy that follows strict procedures
  • Conduct regular audits to ensure compliance
  • Carry out thorough background checks on third parties and organisations within the supply chain before partnering with them

7. ESG should be a focus within compliance recruitment

Following our previous trend for compliance in 2023, due diligence surrounding a focus on environmental social and governance (ESG) will be a significant consideration for companies within the compliance industry.

ESG reporting and initiatives revolving around the subject are primarily voluntary. However, in the UK, companies publicly listed with an annual turnover of more than £500 million and over 500 employees are required to report on ESG. Since 2022, ESG reporting has been mandatory for over 1,300 of the UK’s most prominent organisations and financial services firms. 

Despite ESG reporting yet to be mandatory for all businesses, new waves of regulation are on the horizon that will see an expectation for more companies to show evidence of their compliance within this space. For example, by 2024, the EU’s Corporate Sustainability Reporting Directive (CSRD) will make it compulsory for around 50,000 businesses to report on ESG.  

These ESG initiatives are imposed to ensure companies are working in an ethical way, taking into account their responsibility of supporting climate change, how they treat their employees and other shareholders, and their approach toward financial compliance - with the latter seeing regulators putting an increasingly firm stance on financial greenwashing. 

In 2023, businesses should ensure their compliance officers understand the developments of ESG reporting or at least turn to compliance recruiting firms to find the professionals that can ensure their brand is doing everything to comply with ESG regulation - whether it’s compulsory for their organisation or not. 

Why? Because it’s better to be prepared to comply with ESG now, as it will likely become mandatory for all companies in the not-too-distant future as the world takes a more thorough approach to climate change, social responsibility and sustainable investing. 

8. Compliance specialists are in high demand

Our final corporate compliance insights for 2023 surround the demand for talent within the space, a demand that has grown 96% in recent years. This demand stems from the previous points we've mentioned in this guide regarding the importance of governance, risk, and compliance (GRC) factors, including the need to understand the latest sanctions and regulations for the growth of digitalisation, cybercrime, and the need for thorough due diligence and ESG.

As a specialist compliance recruitment agency, it was unsurprising to see the rate of hires made within the industry drop during the pandemic. However, this is far from the case today, as businesses increasingly seek compliance specialists to keep their operations secure and compliant. 

One challenge is that with the high demand for compliance specialists comes an increasingly competitive market whereby talent shortages create a limited pool of professionals with the skills required to keep your business compliant. Unless you have an unlimited budget to support talent with excellent salaries and employee benefits packages, you may find acquiring new people for your business harder. 

While RegTech and digital transformation can help remove some of the strain of this talent shortage by automating certain tasks, other solutions are required to combat the demand for talent. 

One trend relating to the demand for talent in compliance in 2023 will be to provide upskilling opportunities for existing talent. According to the CIPD Labour Market Outlook, 47% of employers have turned their attention to upskilling their existing compliance specialists to help them overcome the talent shortage and skills gap.

In 2023, the need for skilled professionals in the field of compliance is predicted to maintain its robustness, especially in industries such as financial services, healthcare, transportation, and energy - all of which contend with extensive regulatory frameworks. Read on to discover how our compliance recruitment expertise can support you with compliance industry trends like this. 

Final thoughts

Now you’ve read our top 8 compliance trends 2023 guide, it should be clear that the compliance space is and will continue to adopt more digitalised processes, from the growth of digital transformation and the evolution of AI and RegTech to new crypto regulations. 

Additionally, other corporate compliance insights, such as the need to understand the latest compliance sanctions and adopt an ESG strategy while carrying out thorough due diligence to remain compliant and combat the challenges of cybercrime, should be high on the agenda of considerations for businesses within the compliance industry. 

Ultimately, these compliance industry trends culminate with a growing demand for talent. Thankfully, this is something we can help with. Scroll to find out how. 

Looking for support from a compliance recruitment agency?

If you are a fast-growing business on the lookout for the top compliance specialists within the legal and financial services sector, we can help. 

Our team of compliance recruitment experts remain updated with the latest compliance industry trends, have a deep knowledge of the legal and financial market, and are equipped with an unparalleled global talent network, allowing us to support your business growth to ensure you stay ahead in the competitive market.

Find out how we can cater to your specific requirements and grow your compliance team by contacting a member of our team today.