We spoke to Susannah Hammond, a senior regulatory intelligence expert with more than 30 years of wide-ranging compliance, regulatory and risk experience in international and UK financial services. She is co-author of Conduct and Accountability in Financial Services: A Practical Guide published by Bloomsbury Professional.

Tell us about yourself

The easy answer is I am a career compliance officer, but that covers a degree in Materials Sciences (the study of metals, ceramics and polymers) and qualifying as a chartered accountant with the now defunct Arthur Andersen before I stepped, somewhat by accident, into the world of compliance at SG Warburg.

I had gone to Warburgs to interview for a finance role when, halfway through my conversation with HR, I was asked to wait as they would like me to speak to someone else. And so I met the legendary John Mayo – formerly lead partner at Linklaters and architect of much of ‘A’ day. Several hours later I had agreed to join the new compliance function at Warburgs. Since then, I have been a head of compliance multiple times, pivoting to writing and talking about risk, compliance and governance when I joined Complinet (which became Thomson Reuters Regulatory Intelligence).

I am now about to portfolio my career, combining the writing (including finishing up the second edition of Conduct and Accountability in Financial Services) with non-executive directorships and ad hoc projects. 

What are your areas of expertise?

The baseline of my expertise is the ability to determine the practical implications of relevant rules, regulations and requirements for UK and international financial services. That covers risk, compliance, governance and regulatory affairs. It also specifically covers culture and conduct risk which are now acknowledged as inherent components of the successful management of a financial services firm.

Another element of my expertise is the ability to communicate, clearly, succinctly and at all levels of a firm, the impact of relevant requirements and associated regulatory expectations.

What has been the proudest moment of your career?

It’s interesting to consider proudest career moments – there have been many proud moments of very different types. Looking back, a very proud moment was not only getting Caspian Securities (a start-up investment bank selling the emerging markets into the emerged) authorized around the world but also keeping the business out of regulatory trouble for its lifetime. Back in the 1990s, Caspian did groundbreaking business in Russia, India, Turkey, South America and Asia, something of a white-knuckle ride at times but an amazing experience.

Another very proud moment was getting a new podcast – Compliance Clarified – off the ground at TRRI and, as the inaugural host, growing it to thousands of subscribers in just a couple of years. Podcasts are a very different discipline and with Compliance Clarified we demystified topical compliance issues and gave listeners practical, actionable takeaways to help them tackle key challenges.

What are the biggest challenges and opportunities facing compliance?

One of many benefits of a long career is the ability to see the cycles in financial services. One of the biggest challenges facing risk and compliance functions is the lack of consistent investment. After crises (or major enforcement action) money is piled into compliance functions and then as memories fade, compliance is often seen as less important and so investment and senior manager interest wanes.

It is not just a question of investment in people but also in the wider infrastructure of a firm. Even today there are rather too many firms who are operating with a patchwork quilt of systems. They employ ad hoc workarounds rather than enjoying the benefits of a seamless integrated infrastructure with unfettered line of sight to all key emerging risks. Compliance functions therefore not only have to deal with fluctuating investment in their own functionality but also must deal with a potentially fragmented infrastructure in the wider firm, inhibiting the ability to both horizon scan and robustly implement (and monitor) policies and procedures.

That said it is not all doom and gloom. There are huge opportunities for compliance to leverage new and emerging technologies. In addition, the widespread introduction of personal accountability regimes has led to senior managers becoming (and staying) much more focused on all aspects of compliance. Compliance functions need to embrace and champion new technological solutions whilst being aware that they need to be built on solid, fully tested, foundations. To maximise the technological opportunity, it is key that the back/middle office solutions deployed keep pace with those deployed in the front office.

Another opportunity for compliance is to demonstrate its continuing value to not only the firm but also its senior managers by developing a suite of robust, repeatable evidence showing the compliant discharge of regulatory obligations.

Is AI an opportunity for financial services firms to offer better customer outcomes?

As has been said by many commentators, AI is both a threat and an opportunity. Indeed, depending on where you look the likes of ChatGPT is either going to save the world or be the cause of Armageddon. Financial services firms need to navigate the real-world use case(s) for AI in a competitive marketplace where the successful deployment of AI has the potential for both improved customer outcomes and substantial cost savings.

Many firms are naturally cautious about deploying AI and I suspect much of the hype around wholesale adoption has been overdone. The use of explainable, transparent, bias-free AI combined with a human-in-the-loop has enormous potential to handle vast volumes of data (whether that be trades, communications or whatever) and pinpoint the potential risks – quite literally being able to find possible needles in the haystack. For a compliance function there are huge obvious benefits to be able to use a specifically tailored AI solution for monitoring and reporting.

The (security) threats arise from poorly understood, inappropriately trained AI models with inherent biases which are unduly relied upon. Any firm that choses to blindly make decisions based on inappropriate AI models will get itself into lasting trouble with regulators and customers alike.

What challenges do women in financial services face?

The first thing I’d say is that the opportunities for women in financial services have definitely got better. When I first started, more often than not I was the only woman in the room, now that’s a rare occurrence. Similarly at conferences it used to be all men on panels, now it is a much more even split.

In terms of advice for women in financial services, I’d strongly recommend investing in keeping your own skill set as current and relevant as possible. Part of that would be keeping up with any continuing professional development requirements stemming from professional qualifications – in addition to being a chartered accountant, I am a chartered fellow of the Chartered Institute for Securities and Investment and the required 35 hours CPD, often fulfilled via CISI TV, is an excellent way of keeping up to date on a wide range of topics.

For women in particular, having a really solid skill set is invaluable in supporting the confidence and self-belief required to operate successfully in financial services.

What advice would you give to your younger self?

Be better at having the courage of your convictions and have more self-belief. Both easy to say with hindsight but when juggling work and family life, it did feel overwhelming to make big life decisions such as moving up to Yorkshire to work for the Halifax. It was an enormous step to move away from a job in the City and a house in the home counties to living and working in Halifax. It’s not a decision I have ever regretted but it was life changing.

Can you recommend a good book?

If folks haven’t already read it, I would thoroughly recommend A Gentleman in Moscow by Amor Towles – beautifully written and one I will be re-reading. I am looking forward to reading Butter by Asako Yuzuki which has come highly recommended.