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Vlad Paraschivescu (mebs): The Man Behind the Compliance Machine
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Compliance is a complicated field that businesses can’t afford to ignore. We talked with Vlad Paraschivescu, head of compliance at mebs, about why compliance needs a human touch.
What challenges do regulatory requirements currently create?
There are four main topics. One is the going concern: if you don't comply, you lose your license, you can get fines or damage to your reputation. After that, costs are the biggest thing. More requirements mean more work, and more work means you need more capital, largely to cover the costs of acquiring and keeping talent. Then there’s scalability. If you want to grow, you need to follow an increasing number of requirements. Gone are the times when one person could master all topics, so you need to specialize, both as companies and as individuals. And fourthly there are IT systems. They’re the bedrock of your company and of your business, because without them, you’ll have to perform many complex tasks, such as reporting, manually. Imagine the time!
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How does specialisation affect a compliance officer’s role?
You still need to be polyvalent, to master various topics, but this can go only so far. There are AML and KYC requirements, ICT requirements, ESG, and so on. You need to have specialists tackling these topics. The tricky part though is keeping them interconnected while moving forward, because compliance shouldn't be seen as a blocking point. We should be enablers showing how something can be done. I'm not talking about dealing with a sanctioned individual or other extreme cases, but on a daily basis it's about how to mitigate your risk. If you do that effectively, you add value and to add that value you need to specialize vertically, you need to know your process from A to Z, even though you might do just steps B and C. Moreover, you need to be aware of what's happening in the market, what the business is about. Without that business sensitivity, I don't think you can go that far. That's a tricky balance
“You need to know your process from A to Z, even though you might do just steps B and C.”
What does the future hold for compliance officers?
You need to be able to integrate technological tools in your approach. Some even say that processes can be entirely automated, but I see AI and other tools just as a support, a means to an end. AI can identify patterns more efficiently, it can crunch numbers faster, but you still need a human touch to be able to synthesize this. Otherwise, we'll just become GPT copies of each other and that is unfortunate. And I don't think regulators would be very happy to hear that one has “automated compliance” without any human interaction. There might be a dystopian future where you have two AIs talking to each other, where you bypass the human element, and that's mind-boggling. You still need humans ready for when something unexpectedly goes wrong.