For the fourth episode of our Compliance Talks we remain in the financial compliance area, since the protagonist of this interview is Manfredi Minuto, Head of Compliance, Risk Management, AML, Legal and Corporate Affairs at Ceresio Investors Group. Thanks to his long experience in the compliance field, the fourth interviewee of our column also added several very interesting elements about the state of the art of the sector in Italy and about the importance of innovative technological tools to support the typically human work of regulatory analysis and decision making.
Manfredi, tell us more about who you are and what you do for your company.
«I am Head of Compliance, Risk Management and Anti-Money Laundering for the three Italian companies of the Ceresio Investors Group: Ceresio SIM, Global Selection SGR and Eurofinleading Fiduciaria».
What do you enjoy most about your job and what do you find most difficult?
«I love my job, I have been doing it for more than 15 years now and it continuously motivates me. Regulatory changes, the need to update and adapt business dynamics to the ever-changing environment allows me to find new motivations every day. There is nothing in particular that frustrates me or that I would gladly avoid, since discussion is also part of the game, which can sometimes be heated but always constructive, when it comes to implementing structural adjustments to operations in order to be compliant with the regulations».
What are the main skills a Compliance Officer must have in your opinion?
«Taking for granted a deep knowledge of the regulatory environment, I believe it is essential to have excellent communication skills to convey messages effectively. One must be prepared and persuasive otherwise the risk is to be seen as an obstacle to business».
What is the main problem or limitation in the area of compliance?
«The significant regulatory production in recent years is certainly a problem in terms of responsiveness in understanding and adapting the structure to the new requirements. There is a strong risk of falling behind on certain obligations due to the volume and speed of regulatory production».
Do you think there are sufficient resources dedicated to compliance in Italy?
«Since the entry into force of MiFID, in 2007, the role of compliance has evolved drastically, changing from a mere controller to a tool that supports the business, especially ex ante. A decidedly cutting-edge compliance culture is developing».
In which steps of compliance processes would you most need the support of innovative solutions?
«Automated and up-to-date compliance risk assessment systems are essential in order to be able to intercept both regulatory changes and their impacts on business and, consequently, to be able to plan targeted control activities. In this we are perhaps even further behind than in the world of Internal Audit, which already has an Italian and international trade association that also dictates operational standards. This would also be desirable to further improve the role of compliance».
Do you currently use technology tools to support your work?
«I do not use any particular technological tools. I built my compliance risk matrix using databases that I maintain independently».
If you had a magic wand, what tool would you create to support your work?
«Certainly a system that can notify me in real time on how and where a new regulation affects my business processes. Then, of course, I would evaluate on a case-by-case basis, but it would help me to have immediate feedback on the procedural impacts».
What do you think about the possibility of applying Generative AI like ChatGPT to compliance or, more generally, to regulatory analysis?
«It is a subject that undoubtedly fascinates me and could potentially have some very good implications in terms of regulatory analysis. Of course there remains the personal assessment, based on one's own business reality and there, fortunately, the human being cannot yet be overcome».
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?
«It is clear that rules in Europe are stricter and they are the result of past experiences, even bloody ones. Today, our ecosystem, often criticized and vituperated because it is bulimic in the production of regulations, makes it possible to guarantee levels of security for investors that cannot be found in other jurisdictions. I believe that recent crises will not have a dramatic impact in Europe, and particularly in Italy, precisely because of what I said earlier. We have built up our systemic antibodies by strengthening both internal and external supervision. In short, I am not particularly worried».
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?
«Regulation is crucial. Often, as mentioned, we complain about the increasing production of regulations, but it is the one that ultimately allows us to ensure enviable security and stability. It is a bit of a game of both sides: we complain about the continuous regulatory adjustments required, but, deep down, once the storm of their implementation has passed, we wonder how we had managed so far without clear and defined rules. The Wild West looks good on TV, not when it comes to customers' savings or investments».