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Audio Quick Take: KPMG’s Amy Matsuo on Building Trust at the Forefront of Change

Audio Quick Take: KPMG’s Amy Matsuo on Building Trust at the Forefront of Change KPMG’s recently released 2021 Chief Compliance Officer (CCO) survey explores how CCOs across multiple industries are adapting to new global trends and evolving risks. CCOs are shifting from being responsive to being proactive—including anticipating changes in regulatory and stakeholder expectations and…

Audio Quick Take: KPMG’s Amy Matsuo on Building Trust at the Forefront of Change

KPMG’s recently released 2021 Chief Compliance Officer (CCO) survey explores how CCOs across multiple industries are adapting to new global trends and evolving risks. CCOs are shifting from being responsive to being proactive—including anticipating changes in regulatory and stakeholder expectations and preventing exposures before they occur—by adopting new approaches and technologies that help their companies stay at the forefront of change.

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Julie Devoll, HBR

Welcome to the HBR Quick Take. I’m Julie Devoll, editor of special projects and webinars at HBR. Today I’m joined by Amy Matsuo. Amy is the leader of compliance transformation, ESG [environmental, social, and governance], and regulatory insights at KPMG. She’s here to share some of the insights from KPMG’s 2021 Chief Compliance Officer survey. Amy, thank you so much for joining us today.

Amy Matsuo, KPMG

Thank you, Julie. Thanks so much for having me, happy to be here.

Julie Devoll, HBR

Amy, start us off by telling us a little bit about the survey findings and what information you were looking to uncover.

Amy Matsuo, KPMG

Sure. So we both surveyed and analyzed almost 250 chief compliance officers at Fortune 500-level organizations across multiple industries on how they’re adapting to new global trends and evolving risks. The survey highlights the changes that we expect to see in compliance over the next three years as organizations navigate increased regulatory scrutiny, gaps in resources and budgets, and competitive pressures to harness large volumes of data into meaningful analysis. We asked them about their priorities, what they want to enhance in areas where they plan to invest. We also asked them about how they’re expanding their scope of compliance and their role within their organization to embrace these new areas of risk, and specifically asked questions around automation and technology ESG and how they’re accommodating the shift toward post-pandemic ways to work.

Julie Devoll, HBR

You mentioned one of the things you were looking at were ways that CCOs are looking to enhance within their organization. What were some of the key areas that you found?

Amy Matsuo, KPMG

Really interesting survey results in this regard, as far as a key takeaway. We did allow survey respondents to pick more than one [answer], so this is not mutually exclusive by any means, but number one: more than two-thirds of respondents answered the use of automation and technology, which is probably not too much of a surprise but [is] a great indicative, proactive look at how compliance is evolving to get that kind of overwhelming response. So about 67% on the use of automation and technology, but likewise, strong showings in other areas. Data analytics: 35%. Regulatory change management: 32%. Risk assessments, 26%: Monitoring and testing: 23%. So again, a lot of enhancement looking to come to this area within the organization. What’s key to these findings is really the contrast to our 2019 survey, where monitoring and testing and investigations were the top two activities to enhance. As a comparative for 2019 to this 2021 survey, you see this movement from more reactive to proactive compliance, which is exciting for all of us in this space, to see that shift toward more proactive compliance activities.

Julie Devoll, HBR

In terms of the CCOs’ top regulatory and compliance obligations, what are their areas of focus, and what trends are you seeing?

Amy Matsuo, KPMG

Interestingly, almost 40% of respondents indicated that industry-specific regulations were among their top obligations to refine. The reason that’s interesting is that’s a 16 percentage point increase over our 2019 survey. While this clearly reflects ongoing regulatory focus on those highly regulated industries like financial services and health care life science, it also reflects a growing regulatory focus [on] other areas as well—so technology, telecom, consumer products, and retail, and industrial manufacturing. In addition, I would say 70% of respondents expected to see an increase in compliance focus by their regulators. No one believed that it would decrease. I think that’s a really important finding, the sort of regulatory intensity towards this space. About 61% of respondents identified new regulatory requirements as being one of their top challenges. And one top obligation that CCOs are focused on refining in that space is really consumer protection—34% of respondents indicated consumer protection as a focal area, up 18 percentage points from 2019.

Cyber and information protection ranks among the top obligations as well, by about a third of respondents. This is reflective of the growing discussions around data privacy and security for both individuals’ and organizations’ own proprietary data.

Julie Devoll, HBR

I’d like to discuss ESG, as it’s such a hot topic right now and I imagine it’s especially so in the regulatory compliance area. What did CCOs have to say about ESG?

Amy Matsuo, KPMG

This is another interesting finding [from] this survey. We are seeing an increased ESG focus with chief compliance officers, specifically with social issues and with issues of climate change making global headlines. Organizations are increasingly

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