I’ve just seen someone’s self-penned self-description of himself on LinkedIn. He describes himself as a “patient advocate.” Well, he’s American so he writes it “Patient Advocate.” And that led me to think of the nature of compliance.
I used to be an advocate. I appeared in the magistrates’ court, the county court and the High Court including in the hallowed halls of the Palace of Justice in the Strand, which at the time was very rare for a solicitor. Of course, I also appeared in a range of tribunals and in chambers hearings in all of the above. I appeared before, obviously, magistrates but also District Judges, Masters and High Court Judges plus panellists in various other venues. There was a feature of all of them – the Court’s time was more important than mine and therefore even though I might have what appeared to be a fixed appointment, I would have to spend time hanging around in the corridors or, depending on the Court, the advocates’ room.
And, of course, I had to be a very patient advocate. Or, to use the Blyton-esque form, a Patient Advocate.
I have a bookshop near my home. It specialises in remainders and over-runs and it is completely indiscriminate as to what it stocks and where books are placed. Unlike most bookshops, it is not divided into sections. It’s a jumble sale in bookcases that tower above my head and run in tight s-bends, like those queuing systems that make you walk through a snake of nylon straps even when there is no one in front of you but with much more to do. I admit, my system of buying books there has led to some poor results (a book about the history of coffee turned out to present the case that only Americans drink and / or buy and sell coffee) and a duplicate or two but, in general, it has served me very, very well because, like the shop, my system is to have only the most vague system: go to the shop, pick up three random books, pay, leave.
One of the things I have learned by this approach is that what seems to be a recent development in English began in popular American literature (and therefore one assumes in American colleges) in the 1970s: the abolition of the possessive apostrophe. It’s no surprise that that outpost of all things American, Oxford University, has recently endorsed this peculiarity.
The possessive apostrophe is a source of great amusement in England. Greengrocers, in particular, seem to have a congenital defect that makes them use it in exactly the opposite way to that which is correct. They insert it in plurals and omit it from possessives. “Ten bob a pahnd fer yer onion’s, guv” – or it would be if apostrophes in the spoken word were visible; and if the “bob” or shilling was still legal tender and if British traders were allowed to sell in pounds, as they still do in Jersey.
But in their signs, the “onion’s” are rife – and so are the “caulli’s” which, accidentally, they get right because that apostrophe is not demonstrating a possessive, nor is it demonstrating a mistake in the plural; instead it is marking the fact that part of the word has been omitted.
And so, we find the nonsensical has become the norm: we see “butcher block” instead of “butcher’s.” But it’s a possessive: the block of the butcher. So to follow both the rules of grammar and of good sense, it must be “butcher’s.” Cheese made of the milk of goats? Goats’ Cheese, not “goat cheese”. And what kind of twit thinks that “doll house” makes sense?
How do we get “customer service”? Aside from the fact that most such departments appear to have, as their primary objective, to prevent the customer getting service, shouldn’t it be “service for customers” – with a plural? And so when it’s flipped, it’s “Customers’ Service.” And yes, that’s ugly but so is what’s used now. The big question is why it’s not just called “service.” That’d work.
So that brings us to the point of this story. People do stupid, even wrong things, just so that they can feel they belong. They follow trends, in language as in all things.
It doesn’t matter what we talk about – football fans may disagree on the best team but they agree on the best sport. Of course, motor racing fans also agree, but they agree on a different sport. People walk down streets buying sports memorabilia to declare their allegiance, even though they pay for counterfeits that benefit criminal gangs not their idols. From Teddy Boys through Punks, via New Romantics to… and throughout it all there were rockers and greasers and folky people with beards and floaty skirts (not both at once, usually) demonstrating that fashion has its influences and that the concept of the influencer is not new. Indeed, influencers have been around for so many thousands of years that it’s impossible to think of life without them.
Again, it doesn’t matter what we are talking about – the herd instinct is strong. It’s how we get a concentration of, well, pretty much everything. From screaming fans when the Beatles landed in New York for the first time to the idea that a certain qualification or degree becomes a de facto requirement for recognition in a field. Or even a certificate from a commercial company with no standing but its own ego (and yes, I realise the irony of that statement as we issue certificates for our e-learning).
But the herd is led: when we are told that brown is the new black, it’s guiding us to adopt a new habit that, in due course, will be subject to change again.
In the world of food, fashion is almost as fast as fast fashion in clothes. What was unpalatable last week will be a fad next. How many times can a TV chef tell us the best way to make scrambled eggs when each time it’s different? And still people fall for it. Brands come and go and people buy clothes because of the logo, not because of their choice of style and/or quality.
We seem to have lost our ability to be individuals. Those who do not fit are considered rebels but only rebels, outsiders, because of this artificial instinct to exclude anyone who doesn’t fall into our own little version of how we think the world should be. We talk about diversity but diversity is an issue only because we don’t want to be different, don’t want to be the one that doesn’t fit in.
Individuality is where there is creativity. If many modern songs sound the same, it’s because they come out of the same type of factory. Or because record companies promote a “sound” to radio stations and to other outlets. It’s easy to replicate; it’s hard to be different.
TV scriptwriters create catch-phrases that they put in the mouths of characters that they hope viewers will in some way relate to, even if, hopefully, they don’t actually feel empathy for or, worse, emulate them. Strangely, it seems, no one emulates nice people from TV, only the nasty ones. Social media imagines it’s got a “movement” because some people follow a hashtag – and real media, lacking in the ability or desire to research and write decent journalism print copies of tweets and call it a story, fuelling the imaginary cause. Two million people watched, in one week, a video of an aircraft crash claiming to be footage of a particular event – it wasn’t but the hashtag of the flight number pulled people to it even though all evidence pointed to the fact that there was no possibility that it was genuine. Worse, mainstream media made up their own stories to keep readers visiting their supposed coverage.
The prevalence of “fake news” is further evidence of the herd instinct: those who want to manipulate society can do so from the comfort of their own homes without having to go out in the cold and rain or baking sunshine to go “on the stump.” Politicians are overwhelmed with the noise from the few to the exclusion of the needs and wants of the many – and in the face of common sense and even specialist advice. The result is that the many fragment and become their own special few.
What is happening at a national level is that governments all over the world are making policies based not on balanced expert opinion but following the demands of those with a particular agenda. That is not to say that those with that agenda are always wrong – often they are not wrong but, equally, they are not right, either, but they push their view as if there is only black and white, with us or against us.
The reality is that there is an enormous middle ground, an area in which the vast majority of people, and the things they do, live their lives hoping not to be caught up in some conflict of someone else’s making. Yet, they are seen as the enemy if they really don’t care about the cause because it doesn’t directly affect them.
Synthetic rage is a weapon of choice of extremists and it is deployed daily against the middle ground as if they have done something wrong simply by not being a party to an argument.
This happens in class war, in religious isolationism, in economic theory, in campaigning of all types.. it happens anywhere that someone can polarise views and in doing so secure a following. If it turns violent, or violence is threatened, it’s terrorism; if it’s pressurising politicians with the argument that without the support of that group it will lose the next election, that’s politics. Special interest groups arise for almost every cause one can imagine and, in doing so, put pressure on the fabric of society, breaking it down one mutual understanding and acceptance at a time.
And yet, when it comes to financial services compliance, we see the opposite of fragmentation. We see a homogenisation of approach, with regulators agreeing a broadly standardised approach in many parts of the world. The standardised approach is essentially made up of two elements: one is prescriptive, telling regulated businesses what do do and how to do it and saying, in effect, if you don’t do it like this, you won’t have the protection of the system if it goes wrong; the second is to say that regulated businesses must adopt a risk-based approach which, if it is to have any meaning at all, must involve flexibility.
The first encourages a tick-box mentality amongst regulated businesses and regulators. It allows an audit by a junior who is only concerned with quantitative measurements and has neither the knowledge or skill to make a qualitative assessment.
Compliance has become an objective in itself, not a tool of risk assessment and management – and that is fostered by an industry that is now both cowed so that individuality is regarded as rogue and is staffed with many who appear to have lost the power of independent thought. And so they jump onto every passing bandwagon for tech that a snake-oil salesman says will cure all ills – and the regulators, now regarded as a profit centre by many governments with their FinTech and RegTech industry incentives, actively support it; or they collapse into a world in which the buzzword count is perceived as a measure of knowledge, even if there is little or no comprehension of what lies behind that buzzword – even as to why it’s often entirely the wrong word to use.
Financial services businesses have only themselves to blame: a quarter of a century ago, banks and others demanded that regulators tell them what regulators wanted. And so regulators began to produce what have been called notes, guidelines, guidance notes and other names but which are so detailed and considered to be words on tablets of stone that they have become a manual. Some have called them a “roadmap” but that’s an example of the buzzwords which don’t do as they say. A road map gives information as to all the alternative routes between A and B and leaves the user to decide what route to take. He can take the winding roads over mountains or the highway through a tunnel; he can take the long way around the mountain. He can choose to blat all the way in one go or to stop and smell the roses or whatever other diversion takes his fancy. He can drive fast or he can drive slowly. The important thing is that he had choices as to how to achieve his the objective of reaching B in good shape.
The herd instinct is not always bad: passengers on Kuala Lumpur’s modern urban rail system haven’t had it long. One thing that anyone who has ever visited Asia will know is that no Oriental knows how to queue. But, while there are no markings on the platforms except the no-go yellow box so passengers can get off, and no-one policing them, Malaysians have developed something extraordinary. They create two lines, one at each side of the yellow box. Those queues are long. When the train arrives, passengers get off and walk unhindered, with gaps being made in those queues for them to cross and to reach the escalators or lifts. No one jumps the queue: they file directly into the carriages and they, mostly, sort themselves out as to those who will get off in a couple of stops and those who will go on for longer. Seats are given up by the young for the elderly, even if they don’t need them. Here’s the thing – no one has told them to do this. They have developed their own crowd control, a compliance system that works because it’s in everybody’s best interest that it does.
This is what is missing in financial crime risk management and compliance: the common sense. We have lawmakers and rule-makers who have lost the recognition that the vast majority of people will tend to do the right thing and will become self-policing. Yes, there will be cases where some people don’t comply. And there will be those, like those who abandon apostrophes, who say “don’t let’s do compliance because it’s too hard.”
But most people, with a little guidance, know right from wrong; with a little help, they will develop risk systems and comply with them because they understand why they are doing it and it makes sense.
Much of financial services compliance is to prevent abuse by rogues. But the burden on everyone else is far too expensive and the bar set far too high. We need to unravel most of the regulatory detail that’s in financial crime risk and compliance and to tell regulated businesses that it’s their own responsibility to identify their own risk profile and to develop systems and processes to deal with it and that, if they fail, they will be punished.
But the punishment should be for failure to be effective at preventing financial crime not for failing to meet a set of obligations that – as more and more cases show – don’t actually work.
Thank you to the Patients’ Advocate for the inspiration. You can use my correction without charge.
And thank you to one of the world’s great individuals – Colin Chapman. The banner at the top of this article is inspired by the colours of Lotus, the engineering company and racing team which inspired so much of today’s sports and road cars – just because he thought differently.