A plea for adoption of ethical compliance: Avoiding pitfalls of compliance groupthink and consulting

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.