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This paper aims to derive the conditions under which a financial services firm will want to hire a compliance services company and show how much money they should spend.

This paper uses a mathematical model to show the intuition behind many of the compliance decisions that cost financial services firms billions every year.

This paper finds that hiring compliance firms may save banks and brokerages money. However, their advice may lead to an embarrass de riches – whereby the lower compliance costs and higher profit advantages they confer may lead to more regulation. Regulators may furthermore tighten regulation – with the expectation that financial service firms will adapt somehow. This paper presents a fresh perspective on the Menon hypothesis, deriving conditions under which financial regulations help the competitiveness of an international financial centre.

The paper represents one of the first and only models of compliance spending by financial services firms.

This paper provides five potential policy responses for dealing with ever ratcheting financial regulations.

The paper hopefully launches literature on the compliance service industry – and the buy-or-do decision to engage in financial services compliance. This paper finds that efficient compliance can hurt firms, by encouraging regulation. This paper shows how firms can forestall the extra regulation that comes with easier internet and computerised monitoring.

This paper, set in the context of a rationale for financial regulation, considers how the Financial Services Authority’s (the regulator) approach to establishing compliance competent organisations in the life assurance sector (the regulated) has evolved from a prescriptive approach to one of cooperation with those regulated, in order to establish a working partnership. It focuses on investment business and the resulting importance of conduct of business regulation. It reviews the regulator’s approach, linking academic theory to existing practice and the progress made in the developing and evolving relationship between the regulator and the regulated. It establishes what steps/phases have already taken place within life assurance companies seeking to incorporate and change their compliance culture. It creates a template for the review of progress in seeking to achieve the regulator’s goal of compliant competent organisations, while identifying the essential elements of the new partnership approach. This approach will not only meet the regulator’s stated aim of improving consumer protection but also benefit life assurance companies themselves.

Compliance is key to the operation and reputation of the financial services sector and is now completely embedded in the way financial services organisations carry on investment business. It is also fundamental to the Financial Services Authority (FSA) in seeking to achieve its regulatory objectives as set out in SS. 3‐6 of the Financial Services and Markets Act 2000. A great deal has been written on the topic of compliance and the core objective of this paper is to review and comment on the current approach to compliance which has evolved since the introduction of the Financial Services Act 1986. It notes the change of emphasis by the FSA from individual compliance competence to organisational compliance competence. It focuses on conduct of business regulation and highlights the importance of training and competence to compliance and explains how the regulatory approach has been changing from a rules‐based approach to a more flexible ethical one.

This article argues that a more broadly based understanding of the processes of the enforcement of regulation and compliance needs to be developed. It highlights aspects of two recent newsworthy cases of non‐compliance with financial regulation. It concludes that future practice needs to be informed by research from a wider range of theoretical disciplines than have been employed in the study of financial regulation hitherto.

The increasing use of cost‐benefit analysis (CBA) in financial regulation is bringing a sharper focus on the benefits conferred by regulation. This paper addresses the impact of that sharper focus on the compliance culture of regulated firms. Why focus on the benefits of regulation? What does CBA have to offer to the compliance culture of authorised firms? How does the introduction of CBA fit in with other developments in the regulatory arena? This paper offers some tentative answers to these questions.

If the UK retail financial services sector is to seize the opportunities which will emerge in the future, it will be necessary to restore consumer confidence in the market. This paper argues that this will only be achieved through a radical transformation in the nature of regulatory compliance. The roots of the current consumer crisis of confidence are exposed by retracing the recent history of the sector; particular consideration is given to how the sector has responded to the changing political, economic and regulatory conditions of the post‐War era. It is possible to characterise the sector prior to the 1980s as somewhat anti‐competitive and lacking in innovation. Changes during the 1980s led to highly favourable business conditions, without stringent regulation, making it easy and profitable for the sector to continue to be short term in outlook without considering the longer‐term consequences for consumer confidence. Not surprisingly, the drive for short‐term profits led to the exploitation of many consumers and the subsequent scandals have reduced general confidence in the sector and also resulted in a regulatory backlash. Demographic changes and an emerging political consensus on a reduction in state welfare provision mean that the future business environmnent is potentially very promising. However, if the sector and its constituent organisations do not evolve to regain the trust of consumers and satisfy the demands of their regulators they will face severe competition from outside competitors and an even more hostile regulatory environment. Many of the organisations in the sector will need a complete overhaul in their attitudes to compliance if they are to succeed. Current approaches to developing internal compliance cultures may not be enough but emerging technology may soon provide a revolutionary new approach.

If financial services institutions (FSIs) do not comply with a variety of new regulations they can face criminal charges. Despite budget pressures they must therefore continue to invest in technologies in support of their compliance mandate. This paper describes the major regulations applying to FSIs and discusses IT spending to comply with those regulations.

This study aims to examine the effect of Financial Action Task Force (FATF) compliance on the degree of financial inclusion (FI) across 174 economies during the period from 2011 to 2021, including developed and developing countries.

This paper uses panel dynamic threshold regression to examine whether there is a threshold effect that exists in FATF compliance.

The findings show that FATF regulations enhance financial inclusiveness all over the world, but at the same time, FATF regulations regarding AML/CFT implications impose a high cost on financial institutions above the threshold of FATF compliance.

This study’s findings indicate that nations should undertake deliberate struggle to reduce the prevalence of money laundering (ML) and terrorism financing by putting in place effective FATF regulatory frameworks to support FI.

This study’s findings indicate that nations should undertake deliberate struggle to reduce the prevalence of ML and terrorism financing by putting in place effective FATF regulatory frameworks to support FI. Regulators must, however, guarantee that the process is cost-effective and efficient.

In June 1994, and despite serions misgivings front the finance industry and investors alike, the Personal Investment Authority (PIA) was ‘recognised’ as the new retail self‐regulatory organisation (SRO)for the investment business industry in the UK. This paper traces the background to this event and the development of the PIA from inauguration to recognition. It also examines the concerns expressed by its critics and the findings of the all‐party Treasury and Civil Service Committee, which produced an interim report on the subject. It concludes by considering some alternative reform proposals and asking what the future holds for the PIA.

This paper aims to discuss the evolution of regulation and compliance in the past 20 years, to the current state of affairs. Despite earlier calls for ethical compliance within financial institutions, there remains scope for improvement within practice (as evidenced by on-going regulatory issues in the banking sector).

Pre-crisis academic models of regulation and compliance are reviewed for evidence of use in practice. Some preliminary inductive research evidence is presented, following data collection via interviews with individuals impacted by compliance in financial service organisations. The interview data, facilitated by repertory grid, provide a post-crisis assessment of the issues faced by practitioners to comply with a new regulation.

An over-reliance on group think and consulting services in compliance approach is potentially holding back progress in compliance service. Due to the limited recent empirical data offered in the literature, we believe further research into this area should be undertaken.

This piece of research will provoke reflection on current practice vs existing academic theories, and seeks to identify whether alternative models are viable for the future of compliance approaches within practice.