Aptus.AI’s Compliance Talks, episode 3: interview with Carmine Raiola

Aptus.AI’s Compliance Talks, episode 3: interview with Carmine Raiola

For the third episode of our Compliance Talks we get back to financial compliance, more specifically to the banking sector, moving away from the pharmaceutical regulatory area, the topic of our last interview. The protagonist of this blog post is Carmine Raiola, Compliance/AML Officer of a BCC (Banca di Credito Cooperativo – Cooperative Credit Bank) member of the ICCREA Group. Even the third interviewee among the most important exponents of Italian compliance emphasizes the importance of the awareness that compliance must be a function truly at the service of business, therefore capable of generating a competitive advantage for the companies which interpret it in this way. But let’s find out what the expert thinks.

Carmine, tell us more about who you are and what you do for your company.

«I am currently the Anti-Money Laundering Manager of a BCC belonging to the ICCREA Group. My role entails the task of monitoring, in compliance with the instructions of the parent company (ICCREA Banca S.p.A.), the risk of the Bank’s involvement in money laundering and terrorist financing. My current professional experience represents a deeply rewarding phase of a journey that started more than 25 years ago in a medium-sized local bank. A path that has seen me working on compliance issues for more than 15 years now, which means, in fact, since the very establishment of the Compliance Function, with the issuance of the Supervisory Provisions in 2007. In addition to the time spent studying regulations and dealing with more strictly operational issues, my role involves a constant exchange with network operators, which is a source of professional and human enrichment for me and, at the same time, represents the most propitious opportunity to spread awareness of the centrality of the culture of compliance».

What do you enjoy most about your job and what do you find most difficult?

«I think that the most challenging and interesting aspects of my job are the complexity of the issues to be addressed and the need to validate operational solutions tentatively consistent with business objectives. The effectiveness of the Compliance Officer’s work depends very much on a strong corporate commitment, the absence of which generates difficulties in having one’s role perceived as a tool for growth and consolidation of corporate value. And it is perceiving this absence that sometimes generates a sense of frustration. Fortunately, in recent years, things have improved considerably and awareness of the importance of compliance as a tool in the service of business has grown. And this is also thanks to the cultural leap of Compliance Officers, who have long since generally abandoned a consultative approach, towards an attitude that is more aware of the needs of the business».

What are the main skills a Compliance Officer must have in your opinion?

«In addition to ordinary problem-solving skills, which necessarily presuppose adequate and transversal competences, the Compliance Officer must truly immerse himself in the corporate culture and, starting from this, take every useful opportunity to educate on good practices, emphasizing their strict functionality in the creation of value». 

What is the main problem or limitation in the area of compliance?

«I personally believe that the main problem remains the still insufficiently adequate growth of the compliance culture. On the other hand, there is also a difficulty that we could define as being internal to the world of compliance and that is represented by the reference regulatory framework, which is very often confused and contradictory, due to a regulatory technique that responds to the complexity of the issues with the superfetation of the provisions that should ensure their orderly regulation».

Do you think there are sufficient resources dedicated to compliance in Italy?

«Given the urgency of a transversal approach to compliance issues, I consequently believe that significant resources should be devoted, on one hand, to training the actors involved and, on the other, to analyzing the adequacy of business processes. The latter, in fact, sometimes do not sufficiently emphasize the role of compliance as one of the fundamental drivers of winning business decisions».

In which steps of compliance processes would you most need the support of innovative solutions?

«Certainly in the context of analyzing and assessing the impact of non-compliance risks on business processes. Within particularly complex organizations, innovative technological solutions can be really useful in mitigating the risk of a partial impact analysis, which excludes areas that are instead involved, with even very negative consequences».

If you had a magic wand, what tool would you create to support your work?

«Following my previous answer about the possible support from innovative technological solutions, I would certainly create a tool that would make the risk analysis and the planning and monitoring phases of the activities functional to the adaptation of business processes faster and more effectively (by automating them, as far as possible)».

What do you think about the possibility of applying Generative AI like ChatGPT to compliance or, more generally, to regulatory analysis?

«Net of the necessary adoption of appropriate safeguards with respect to the risks related to the use of personal data (as the recent ChatGPT affair demonstrates), I am all in favor of exploiting the potential of Generative AI in the area of non-compliance risk management».

Turning to current issues, how do you comment on the recent crises of major companies such as SVB and Credit Suisse? What impact will they have on the financial ecosystem?

«Regardless of the individual cases, the events recalled teach us once again that an adequate compliance culture, accompanied (consequently) by significant investments in human and technological resources, is a necessary (though certainly not sufficient) condition for safeguarding the entire financial ecosystem from risks that could jeopardize its proper functioning».

Even in the Crypto and Fintech sectors there have been examples of lack of stability (FTX bankruptcy, sanctions at N26, etc.): how much will regulation affect these sectors?

«These two sectors, although characterized by the use of highly advanced technological platforms, have different levels of exposure to the risk of non-compliance. Given their positive potential, the goal must be to ensure their orderly growth, with a regulatory policy that prioritizes the objectives of transparency and fair competition management. My view is that the growth of these sectors, which is already considerable, will be directly proportional to the perceived level of security that legislative interventions will succeed in generating in stakeholders».