Rhonda:
Hey there COMPLY Podcast listeners and welcome to this week’s episode! In this episode I sat down with Jim Downing, Chief Compliance Officer at JLL Securities. We discuss strategies for building a robust and effective compliance program, the evolving landscape of compliance, including AI’s impact, balancing technology with the human element, and the power of networking and mentorship for compliance professionals.
Thanks for listening and enjoy!
Rhonda:
Hello to our listeners, and welcome Jim Downing, Chief Compliance Officer at JLLS and author of "Fundamentals of Compliance," a comprehensive guide to navigating the complexities of effective compliance programs across any industry.
Jim, thank you for meeting with us today. I'm looking forward to our listeners learning more about you and your journey into compliance. Please introduce yourself and share some information about your professional background and path to compliance.
Jim:
Thank you, Rhonda, and PerformLine for having me. My name is Jim Downing, Chief Compliance Officer at JLL Securities in Chicago, Illinois. My path to compliance was interesting. I bet many listeners have felt the same. After college, I didn't know what a compliance officer was.
Nobody knew about these things. I started in sales after graduating college in '99. It wasn't my thing. My income fluctuated a lot, so I decided to go into accounting. I went back to school, working full-time, getting my master's in accounting. One summer day in 2003, at a Cubs game, I ran into an old friend, Chris. He said he worked at this place called the NASD. I'd never heard of it. We talked, and he said they needed people with accounting experience. I'd just finished my master's.
I said the accounting thing was good, but a little boring. Same journal entries every month. I asked for their website, applied, and eventually started working there. I fell in love with it. As an examiner, you go into firms, look at their compliance programs, and see if there are deficiencies. After about five years, I decided I'd had enough of that side of the street. I'd never been on the other side. I was interested in making that jump.
As an examiner, you're at these firms for maybe a week, scratching the surface. I wanted to dig deep into issues, help design programs and processes.
I left FINRA (it was NASD then, then became FINRA) in April 2008. My timing was terrible. Everything crashed. I bounced around a bit at two firms because I got laid off, and ended up at JP Morgan for a considerable amount of time. From there, I went to a couple of other firms before landing where I am now. Throughout my compliance career, I've met many people with similar or very different paths. Some came from HR, Operations, or accounting. I love that the profession is so multifaceted.
Rhonda:
I agree. Everyone I've talked to has a different path. Mine was working in the nonprofit sector, going from nonprofit to mortgage, then compliance. We all have different paths, which is why I always ask, "What compels you to do this work?" It sounds like you've touched so many pieces. Something draws you to compliance. What is it?
Jim:
As a Chief Compliance Officer, I get involved with sales, marketing, finance, operations, HR—everything across the board. This helps me understand my business better and keeps it interesting. For listeners in more junior roles, maybe just reviewing marketing materials or personal trading, who feel they have blinders on, the higher you go in this position, the broader your perspective across the organization. What I love about compliance, what gets me up in the morning, is that we represent this layer of control between our sales and business and the investing public.
I work for an investment bank, so we don't do business with the public directly, but with funds and REITs, and people are invested in those. There's always that association. We're not police officers writing tickets, but we're designing frameworks to prevent fraud, misrepresentation, and other unethical behavior.
Rhonda:
Absolutely. Everything we do has challenges, and compliance is no exception. What are some of the biggest challenges you see for compliance professionals, in your wheelhouse or throughout your journey?
Jim:
That's a great question. When you're designing a process with control points, it's about getting people to change their behavior. One of the bigger challenges is successfully getting people to adopt new behaviors for control, whether it's filing a form, checking a box, emailing something, etc. Reinforcing those things, good training, and oversight are key. It's about changing behavior. People often talk about carrots and sticks.
Rhonda:
There we go!
Jim:
I don't have much of a carrot. I can't give a gift card. There's a little bit of a stick. I could tell their manager. It's about finding the right balance between designing a less cumbersome process so they can sell, generate revenue, or do whatever they need to do. But we need this process because without it, you won't be able to sell.
One way I've helped reinforce behavior is by explaining the "why." Show them real-world examples of what happens if they don't do it. "This person got barred from the industry, this firm got fined." When you have the "why," it reinforces in people's minds that you're not just arbitrarily asking them to fill out a form or check a box.
Rhonda:
Yeah, that makes sense. You can't just tell people "no." You have to explain what "no" means and what they can do. Give them other options.
Jim:
Yeah. You should only be saying "no" maybe 5% of the time.
Rhonda:
Exactly.
Jim:
The majority should be "yes, but..." Yes, we can do that, but we'll have to file these forms or expand permissions. That 5% is for the wacky stuff. "I want to take some clients golfing. We chartered a jet to Hawaii." No. These things need to be reasonable. There are plenty of good golf courses around here.
Rhonda:
What advice would you give a compliance professional starting a program? What are some nuggets you would share?
Jim:
Be curious. Compliance is not for the meek. Don't be afraid to ask what some call "stupid questions." We developed this new product, but is anyone asking for it? Why are we selling it? What's the benefit? Use tact. By being curious, you learn about all aspects of the product, target clients—really digging down. "I want to sit next to you and understand this."
Organization is vital. When retrieving files, data, or information, you want it at your fingertips. Whatever system works—alphabetical, chronological, buckets—use it. Disorganization creates heartache down the road.
Third, understand and develop a good risk assessment. As my book discusses, it all starts with a risk assessment.
Rhonda:
That's the first piece.
Jim:
Yes. Understand what a good risk assessment looks like. Look at ISO and bank risk assessments, information online, buy a book. It drives so much throughout your organization. You don't do it alone. You don't go in a room and say, "Risk assessment!" It's collaborative. You might tell your head of sales something is low risk, and he might say, "There are lawsuits about that in the industry right now."
Rhonda:
Right.
Jim:
So, be curious, be organized, focus on your risk assessment, and update it at least annually.
Rhonda:
Do you apply that to all industries?
Jim:
Yes.
Rhonda:
Can it change in terms of order?
Jim:
No. These are three fundamental values of any good compliance officer: curiosity (asking questions, digging deep), being organized, and the risk assessment. Risk assessment involves judgment of risk, probabilities—a hard and fast skill set for any compliance officer, at any level. In writing my book, I made it specific to not just financial services. I reached out to compliance officers in manufacturing, healthcare, education, other industries.
They were like, "Absolutely!" I could write tons of books on FINRA, SEC, financial services compliance, but there's a much bigger compliance officer industry I was trying to reach.
Rhonda:
I think you did. I haven't gotten the book yet, but I saw the cover. It reminded me of when I was doing compliance. So many foundational things are important. Compliance is that wash, rinse, repeat.
Jim:
Yes.
Rhonda:
Are your policies up-to-date? Have you done training? A new risk assessment? What's changed in your business? You're constantly in that. What tools, software, or otherwise, are most important if someone is starting and they don't necessarily have all the foundation, and spreadsheets may not be the answer?
Jim:
Spreadsheets are great. I'm a master in Excel. I love it for reporting, sorting data, etc. In my industry, we have insider trading requirements. We monitor employee personal transactions. There are tons of software providers for that. I highly recommend anyone in financial services get software and direct feeds, as opposed to... I remember when I started, they'd literally pull a wheelbarrow of personal trading statements out of the mailroom, and you'd sit there for hours going through them.
Looking at compliance tools, be careful when someone promises you the world. Everyone's business is nuanced. Look for tools with flexibility that meet your demands. Reach out to your network. What are they using? What do they like/dislike?
We use compliance tools to monitor trading, for our monitoring and testing program (more of a case management tool), to monitor employee communications (emails, Teams, texts), and, importantly, anti-money laundering tools. A good tool searches all the lists, is accurate, and doesn't give a bunch of false positives.
Rhonda:
That's great. What are some big changes or trends you're predicting for compliance in the next six months? A lot's changing.
Jim:
A lot's changing.
Rhonda:
Every hour.
Jim:
Everyone's talking about AI. This is another opportunity for compliance officers to upskill, understand how it works, and how people in your organization are using it. Do you have a policy? Have you trained them? Some companies say, "No AI at all." Others say, "We built guardrails. You can use it this way, but it doesn't search the internet."
AI's impact on our profession in the next 5-10 years will be to become much more data-driven. As we ingest more data and pull out trends and patterns, looking for issues or just seeing if things are going well, it will change our profession.
I'll go to the grave with this: it's never going to replace us. You still need the human element.
Rhonda:
Yes, with everything.
Jim:
Anyone in your organization who just says, "I fed it into AI, it spit it out, and I used it," that's a red flag. "Wait a minute. Did you read it first? Is it accurate?" There are so many things that can go wrong. The human element is crucial: How is this data relevant? How is this trend relevant? Do I need to escalate this? Is what it's spitting out accurate?
In the next six months, expect compliance tool vendors to add AI attributes, and expect companies, CEOs, salespeople, marketing—everyone—to start using it. Do you understand what they mean? Really dive into it. There are tons of resources on YouTube, TED Talks on how it works.
Devote time to upskilling in this because not only is this technology interesting, but AI regulation is coming.
You should understand: Where are we using it? How's it impacting clients, data? What applies to me?
Rhonda:
States are working on this. Colorado already passed a law. California has. Do you foresee that at the federal level?
Jim:
I think so. I don't understand why we don't have federal privacy protections. It's still at the state level.
Rhonda:
Right.
Jim:
It depends on who's in office. But I think baseline principles at a federal level make more sense, then allowing states to go above and beyond. "You want to make it harder to do business there? Go write unnecessary rules. You've noticed fraud and abuse? Write more stringent requirements."
Rhonda:
There have to be guardrails because it's consumer protection.
Jim:
Yes, 100%. Where critical systems are making critical decisions, like loan approvals, there has to be a human element.
Rhonda:
Absolutely, because...
Jim:
Computers just get it wrong.
Rhonda:
You said it. I didn't.
Jim:
We could give hundreds of examples.
Rhonda:
Absolutely. Thank you. I agree. There should always be a human element with technology. Just that extra set of eyes.
Jim:
That's right.
Rhonda:
What's your secret superpower?
Jim:
My creative side. I play instruments, write short stories, and I'm an artist, a painter. Creating things, learning new techniques, is relaxing, rewarding, enjoyable, and lends itself to my professional life. It gets the creative juices flowing for problem-solving or process design. I wanted to be an artist, but my parents quashed that.
Rhonda:
We did that to my son. He always tells me I'm a dream crusher. He wanted to be an art teacher.
Jim:
Tell him to do it in his spare time. It's more fun that way. I don't have to worry about selling a painting or finishing something someone hired me to do. I just paint.
Rhonda:
Right.
Jim:
I pick up my guitar or saxophone. I played in a band. Find avenues where you're allowed to fail, get creative. I have hundreds of terrible paintings I just paint over. I have about 50 I love, sitting in a box in my basement. But that's okay.
Rhonda:
They're yours.
Jim:
They're mine. Find an avenue where you're allowed to fail, get creative. It's helped me personally and professionally.
Rhonda:
I love that. I wonder if it's a trait of compliance people. I have a creative side, too. I love creating recipes. I think it falls into putting processes together. What are the right ingredients to make things work?
Jim:
Oh, yeah.
Rhonda:
I think it is a trait. I'm going to start paying attention to that. I have a new book for you to write.
Jim:
Let's do it together!
Rhonda:
I'd love to co-author that book. Tell me about your book. What are some important takeaways for compliance professionals? It's on Amazon and Apple.
Jim:
And available overseas.
Rhonda:
What are some takeaways you want someone to get if they grab your book today?
Jim:
It's written for lower-level folks, so they understand how their part fits into the overall program. I started with 11 fundamentals of compliance, then got it down to five. Under these five principles, any company in any industry can design a compliance program that is continuous—continuous improvement, seeking to uncover breaks in controls, potential issues, breaches.
My takeaway is: If you want to understand how to design a system from scratch or see if your existing system is comprehensive enough, this book can help. "Are we doing that? Do we have a monitoring and testing program? A risk assessment program? Do we report to senior management regularly, or is it one-off?"
It's for folks who want to understand the profession, how to design a program. There was a gap in what was out there. Either books by compliance people with their tips and tricks, or $600-$700 law books that were too legal.
Jim:
I went to law school and I'm not reading that, and I don't want to spend $700. My book is $10 or $12, even cheaper on Kindle.
It's meant to be used that way. I've spoken in classrooms at the University of Illinois and Chicago Kent, and I thought, "There's no good book about what compliance is, what we do, what it looks like."
Rhonda:
You wrote the fundamentals, which allows people to explore compliance.
Jim:
Yes.
Rhonda:
It's different to explore it and say, "How can I create a career?"
Jim:
Yep.
Rhonda:
Versus, "I fell into it because the company..."
Jim:
So many of us did, but not so much going forward. I've hired a few people out of college straight into compliance, but they haven't all lasted. Some were like, "This isn't my jam." So many of us, almost everyone I know, started as something else.
Rhonda:
Oh, it's always true. I'm a Chicago girl, so it sounds like you're a Cubs fan.
Jim:
I'm a White Sox fan, actually. I just happened to be at the Cubs game that day. It was fate. If I wasn't there, I never would have run into Chris, never gotten the job at FINRA. This whole career trajectory wouldn't have happened.
Rhonda:
It is crazy. I love the city and love getting back there. I haven't been to a game in years. I'll have to look you up, and we'll have to get out and do a game.
Jim:
Yes, absolutely. I love it.
Rhonda:
Find a good Italian beef sandwich.
Jim:
Oh, absolutely! With hot peppers, dipped.
Rhonda:
Dipped, every time.
Jim:
My doctor may not like me eating them, but…
Rhonda:
Me neither!
Jim:
He's not going to be there when I come to town.
Rhonda:
It's my guilty pleasure.
Jim:
It's pretty much the only place you can get them.
Rhonda:
So appreciate a good Italian beef. Is there anything else you'd like to share with our audience? Any work you're doing now, causes, anything else, other than we'll definitely share information about your book?
Jim:
Networking is vital for any compliance officer or professional. Reach out to people, find a mentor, have coffee. Pre-pandemic, I met a different person for coffee almost every week.
Rhonda:
Wow!
Jim:
Just, "What's your program? What keeps you up at night? Let me tell you what I'm dealing with. Do you know so-and-so?" Really get out there and network. Whenever I have problems, I'm scratching my head, I pick up the phone and start calling my network. "Have you seen this? What did you do?"
Reach out to people, reach out to me. I mentor compliance people left and right. Anyone who reaches out gets a response. "What do you want to talk about? I've got 30 minutes on Zoom." Build that network. I've been doing this for 24, 25 years, and I still run into things I've never seen before.
Rhonda:
Same.
Jim:
Without that network, you're isolated. Build it, feed it, keep talking to people. Get together for an impromptu lunch. It doesn't have to be fancy. Just get together and talk. You'll learn a lot. It helped me get this job. The former chief compliance officer at JLL Securities was retiring and called me. "I know you're consulting. Would you be interested?" A month later, I had the offer. That never would have happened without networking.
Rhonda:
That's one thing we do at PerformLine. I host roundtables, one for mortgage, one for banking. It's amazing. You get a synergy of different people. It's not always the same folks, but that one hour to share best practices, network, talk about things that happened. "We got hit with this exam. Be on the lookout for this."
It's critical to your success. I recall being in compliance, and all I had was the people I worked with. We were all experiencing the same thing. One thing I felt was important when I came to PerformLine was to start these roundtables, do them virtually, so folks, regardless of location, can come together quarterly and interact. Then, hopefully, at conferences, they can connect in person. Building those relationships authentically in a virtual space that carries over to physical spaces. I appreciate you validating the importance of networking.
Jim:
It's so important. When it's just you and your coworkers, you get in what I call the echo chamber.
Rhonda:
Right.
Jim:
"This is what we do, and we've always done it this way." Not really being able to… It's not anyone's fault. Everyone parrots, "That's what we do. You're doing the right thing," without realizing there might be a better way.
Rhonda:
"We've always done it this way."
Jim:
Yeah. That's why it's so key.
Rhonda:
I agree. Jim, thank you. This has been a wonderful chat. Thank you for joining us on the Comply Podcast. I hope you'll come back soon, whether for a roundtable, another podcast, or a webinar. We'd love to have you.
Jim:
Rhonda, thank you. Thank you, PerformLine, for having me. Anytime you want me, as long as my calendar is open, I'll be there.
Rhonda:
That sounds great. Thanks again.
Jim:
Thank you.
Rhonda:
Thanks for listening to this week’s episode of the COMPLY Podcast! As always you can find the latest content on all things marketing compliance you can head to performline.com/resources. And for the most up-to-date pieces of industry news, events, and content be sure to follow PerformLine on LinkedIn. Thanks again for listening and we’ll see you next time!
Hey there COMPLY Podcast listeners and welcome to this week’s episode! In this episode I sat down with Jim Downing, Chief Compliance Officer at JLL Securities. We discuss strategies for building a robust and effective compliance program, the evolving landscape of compliance, including AI’s impact, balancing technology with the human element, and the power of networking and mentorship for compliance professionals.
Thanks for listening and enjoy!
Rhonda:
Hello to our listeners, and welcome Jim Downing, Chief Compliance Officer at JLLS and author of "Fundamentals of Compliance," a comprehensive guide to navigating the complexities of effective compliance programs across any industry.
Jim, thank you for meeting with us today. I'm looking forward to our listeners learning more about you and your journey into compliance. Please introduce yourself and share some information about your professional background and path to compliance.
Jim:
Thank you, Rhonda, and PerformLine for having me. My name is Jim Downing, Chief Compliance Officer at JLL Securities in Chicago, Illinois. My path to compliance was interesting. I bet many listeners have felt the same. After college, I didn't know what a compliance officer was.
Nobody knew about these things. I started in sales after graduating college in '99. It wasn't my thing. My income fluctuated a lot, so I decided to go into accounting. I went back to school, working full-time, getting my master's in accounting. One summer day in 2003, at a Cubs game, I ran into an old friend, Chris. He said he worked at this place called the NASD. I'd never heard of it. We talked, and he said they needed people with accounting experience. I'd just finished my master's.
I said the accounting thing was good, but a little boring. Same journal entries every month. I asked for their website, applied, and eventually started working there. I fell in love with it. As an examiner, you go into firms, look at their compliance programs, and see if there are deficiencies. After about five years, I decided I'd had enough of that side of the street. I'd never been on the other side. I was interested in making that jump.
As an examiner, you're at these firms for maybe a week, scratching the surface. I wanted to dig deep into issues, help design programs and processes.
I left FINRA (it was NASD then, then became FINRA) in April 2008. My timing was terrible. Everything crashed. I bounced around a bit at two firms because I got laid off, and ended up at JP Morgan for a considerable amount of time. From there, I went to a couple of other firms before landing where I am now. Throughout my compliance career, I've met many people with similar or very different paths. Some came from HR, Operations, or accounting. I love that the profession is so multifaceted.
Rhonda:
I agree. Everyone I've talked to has a different path. Mine was working in the nonprofit sector, going from nonprofit to mortgage, then compliance. We all have different paths, which is why I always ask, "What compels you to do this work?" It sounds like you've touched so many pieces. Something draws you to compliance. What is it?
Jim:
As a Chief Compliance Officer, I get involved with sales, marketing, finance, operations, HR—everything across the board. This helps me understand my business better and keeps it interesting. For listeners in more junior roles, maybe just reviewing marketing materials or personal trading, who feel they have blinders on, the higher you go in this position, the broader your perspective across the organization. What I love about compliance, what gets me up in the morning, is that we represent this layer of control between our sales and business and the investing public.
I work for an investment bank, so we don't do business with the public directly, but with funds and REITs, and people are invested in those. There's always that association. We're not police officers writing tickets, but we're designing frameworks to prevent fraud, misrepresentation, and other unethical behavior.
Rhonda:
Absolutely. Everything we do has challenges, and compliance is no exception. What are some of the biggest challenges you see for compliance professionals, in your wheelhouse or throughout your journey?
Jim:
That's a great question. When you're designing a process with control points, it's about getting people to change their behavior. One of the bigger challenges is successfully getting people to adopt new behaviors for control, whether it's filing a form, checking a box, emailing something, etc. Reinforcing those things, good training, and oversight are key. It's about changing behavior. People often talk about carrots and sticks.
Rhonda:
There we go!
Jim:
I don't have much of a carrot. I can't give a gift card. There's a little bit of a stick. I could tell their manager. It's about finding the right balance between designing a less cumbersome process so they can sell, generate revenue, or do whatever they need to do. But we need this process because without it, you won't be able to sell.
One way I've helped reinforce behavior is by explaining the "why." Show them real-world examples of what happens if they don't do it. "This person got barred from the industry, this firm got fined." When you have the "why," it reinforces in people's minds that you're not just arbitrarily asking them to fill out a form or check a box.
Rhonda:
Yeah, that makes sense. You can't just tell people "no." You have to explain what "no" means and what they can do. Give them other options.
Jim:
Yeah. You should only be saying "no" maybe 5% of the time.
Rhonda:
Exactly.
Jim:
The majority should be "yes, but..." Yes, we can do that, but we'll have to file these forms or expand permissions. That 5% is for the wacky stuff. "I want to take some clients golfing. We chartered a jet to Hawaii." No. These things need to be reasonable. There are plenty of good golf courses around here.
Rhonda:
What advice would you give a compliance professional starting a program? What are some nuggets you would share?
Jim:
Be curious. Compliance is not for the meek. Don't be afraid to ask what some call "stupid questions." We developed this new product, but is anyone asking for it? Why are we selling it? What's the benefit? Use tact. By being curious, you learn about all aspects of the product, target clients—really digging down. "I want to sit next to you and understand this."
Organization is vital. When retrieving files, data, or information, you want it at your fingertips. Whatever system works—alphabetical, chronological, buckets—use it. Disorganization creates heartache down the road.
Third, understand and develop a good risk assessment. As my book discusses, it all starts with a risk assessment.
Rhonda:
That's the first piece.
Jim:
Yes. Understand what a good risk assessment looks like. Look at ISO and bank risk assessments, information online, buy a book. It drives so much throughout your organization. You don't do it alone. You don't go in a room and say, "Risk assessment!" It's collaborative. You might tell your head of sales something is low risk, and he might say, "There are lawsuits about that in the industry right now."
Rhonda:
Right.
Jim:
So, be curious, be organized, focus on your risk assessment, and update it at least annually.
Rhonda:
Do you apply that to all industries?
Jim:
Yes.
Rhonda:
Can it change in terms of order?
Jim:
No. These are three fundamental values of any good compliance officer: curiosity (asking questions, digging deep), being organized, and the risk assessment. Risk assessment involves judgment of risk, probabilities—a hard and fast skill set for any compliance officer, at any level. In writing my book, I made it specific to not just financial services. I reached out to compliance officers in manufacturing, healthcare, education, other industries.
They were like, "Absolutely!" I could write tons of books on FINRA, SEC, financial services compliance, but there's a much bigger compliance officer industry I was trying to reach.
Rhonda:
I think you did. I haven't gotten the book yet, but I saw the cover. It reminded me of when I was doing compliance. So many foundational things are important. Compliance is that wash, rinse, repeat.
Jim:
Yes.
Rhonda:
Are your policies up-to-date? Have you done training? A new risk assessment? What's changed in your business? You're constantly in that. What tools, software, or otherwise, are most important if someone is starting and they don't necessarily have all the foundation, and spreadsheets may not be the answer?
Jim:
Spreadsheets are great. I'm a master in Excel. I love it for reporting, sorting data, etc. In my industry, we have insider trading requirements. We monitor employee personal transactions. There are tons of software providers for that. I highly recommend anyone in financial services get software and direct feeds, as opposed to... I remember when I started, they'd literally pull a wheelbarrow of personal trading statements out of the mailroom, and you'd sit there for hours going through them.
Looking at compliance tools, be careful when someone promises you the world. Everyone's business is nuanced. Look for tools with flexibility that meet your demands. Reach out to your network. What are they using? What do they like/dislike?
We use compliance tools to monitor trading, for our monitoring and testing program (more of a case management tool), to monitor employee communications (emails, Teams, texts), and, importantly, anti-money laundering tools. A good tool searches all the lists, is accurate, and doesn't give a bunch of false positives.
Rhonda:
That's great. What are some big changes or trends you're predicting for compliance in the next six months? A lot's changing.
Jim:
A lot's changing.
Rhonda:
Every hour.
Jim:
Everyone's talking about AI. This is another opportunity for compliance officers to upskill, understand how it works, and how people in your organization are using it. Do you have a policy? Have you trained them? Some companies say, "No AI at all." Others say, "We built guardrails. You can use it this way, but it doesn't search the internet."
AI's impact on our profession in the next 5-10 years will be to become much more data-driven. As we ingest more data and pull out trends and patterns, looking for issues or just seeing if things are going well, it will change our profession.
I'll go to the grave with this: it's never going to replace us. You still need the human element.
Rhonda:
Yes, with everything.
Jim:
Anyone in your organization who just says, "I fed it into AI, it spit it out, and I used it," that's a red flag. "Wait a minute. Did you read it first? Is it accurate?" There are so many things that can go wrong. The human element is crucial: How is this data relevant? How is this trend relevant? Do I need to escalate this? Is what it's spitting out accurate?
In the next six months, expect compliance tool vendors to add AI attributes, and expect companies, CEOs, salespeople, marketing—everyone—to start using it. Do you understand what they mean? Really dive into it. There are tons of resources on YouTube, TED Talks on how it works.
Devote time to upskilling in this because not only is this technology interesting, but AI regulation is coming.
You should understand: Where are we using it? How's it impacting clients, data? What applies to me?
Rhonda:
States are working on this. Colorado already passed a law. California has. Do you foresee that at the federal level?
Jim:
I think so. I don't understand why we don't have federal privacy protections. It's still at the state level.
Rhonda:
Right.
Jim:
It depends on who's in office. But I think baseline principles at a federal level make more sense, then allowing states to go above and beyond. "You want to make it harder to do business there? Go write unnecessary rules. You've noticed fraud and abuse? Write more stringent requirements."
Rhonda:
There have to be guardrails because it's consumer protection.
Jim:
Yes, 100%. Where critical systems are making critical decisions, like loan approvals, there has to be a human element.
Rhonda:
Absolutely, because...
Jim:
Computers just get it wrong.
Rhonda:
You said it. I didn't.
Jim:
We could give hundreds of examples.
Rhonda:
Absolutely. Thank you. I agree. There should always be a human element with technology. Just that extra set of eyes.
Jim:
That's right.
Rhonda:
What's your secret superpower?
Jim:
My creative side. I play instruments, write short stories, and I'm an artist, a painter. Creating things, learning new techniques, is relaxing, rewarding, enjoyable, and lends itself to my professional life. It gets the creative juices flowing for problem-solving or process design. I wanted to be an artist, but my parents quashed that.
Rhonda:
We did that to my son. He always tells me I'm a dream crusher. He wanted to be an art teacher.
Jim:
Tell him to do it in his spare time. It's more fun that way. I don't have to worry about selling a painting or finishing something someone hired me to do. I just paint.
Rhonda:
Right.
Jim:
I pick up my guitar or saxophone. I played in a band. Find avenues where you're allowed to fail, get creative. I have hundreds of terrible paintings I just paint over. I have about 50 I love, sitting in a box in my basement. But that's okay.
Rhonda:
They're yours.
Jim:
They're mine. Find an avenue where you're allowed to fail, get creative. It's helped me personally and professionally.
Rhonda:
I love that. I wonder if it's a trait of compliance people. I have a creative side, too. I love creating recipes. I think it falls into putting processes together. What are the right ingredients to make things work?
Jim:
Oh, yeah.
Rhonda:
I think it is a trait. I'm going to start paying attention to that. I have a new book for you to write.
Jim:
Let's do it together!
Rhonda:
I'd love to co-author that book. Tell me about your book. What are some important takeaways for compliance professionals? It's on Amazon and Apple.
Jim:
And available overseas.
Rhonda:
What are some takeaways you want someone to get if they grab your book today?
Jim:
It's written for lower-level folks, so they understand how their part fits into the overall program. I started with 11 fundamentals of compliance, then got it down to five. Under these five principles, any company in any industry can design a compliance program that is continuous—continuous improvement, seeking to uncover breaks in controls, potential issues, breaches.
My takeaway is: If you want to understand how to design a system from scratch or see if your existing system is comprehensive enough, this book can help. "Are we doing that? Do we have a monitoring and testing program? A risk assessment program? Do we report to senior management regularly, or is it one-off?"
It's for folks who want to understand the profession, how to design a program. There was a gap in what was out there. Either books by compliance people with their tips and tricks, or $600-$700 law books that were too legal.
Jim:
I went to law school and I'm not reading that, and I don't want to spend $700. My book is $10 or $12, even cheaper on Kindle.
It's meant to be used that way. I've spoken in classrooms at the University of Illinois and Chicago Kent, and I thought, "There's no good book about what compliance is, what we do, what it looks like."
Rhonda:
You wrote the fundamentals, which allows people to explore compliance.
Jim:
Yes.
Rhonda:
It's different to explore it and say, "How can I create a career?"
Jim:
Yep.
Rhonda:
Versus, "I fell into it because the company..."
Jim:
So many of us did, but not so much going forward. I've hired a few people out of college straight into compliance, but they haven't all lasted. Some were like, "This isn't my jam." So many of us, almost everyone I know, started as something else.
Rhonda:
Oh, it's always true. I'm a Chicago girl, so it sounds like you're a Cubs fan.
Jim:
I'm a White Sox fan, actually. I just happened to be at the Cubs game that day. It was fate. If I wasn't there, I never would have run into Chris, never gotten the job at FINRA. This whole career trajectory wouldn't have happened.
Rhonda:
It is crazy. I love the city and love getting back there. I haven't been to a game in years. I'll have to look you up, and we'll have to get out and do a game.
Jim:
Yes, absolutely. I love it.
Rhonda:
Find a good Italian beef sandwich.
Jim:
Oh, absolutely! With hot peppers, dipped.
Rhonda:
Dipped, every time.
Jim:
My doctor may not like me eating them, but…
Rhonda:
Me neither!
Jim:
He's not going to be there when I come to town.
Rhonda:
It's my guilty pleasure.
Jim:
It's pretty much the only place you can get them.
Rhonda:
So appreciate a good Italian beef. Is there anything else you'd like to share with our audience? Any work you're doing now, causes, anything else, other than we'll definitely share information about your book?
Jim:
Networking is vital for any compliance officer or professional. Reach out to people, find a mentor, have coffee. Pre-pandemic, I met a different person for coffee almost every week.
Rhonda:
Wow!
Jim:
Just, "What's your program? What keeps you up at night? Let me tell you what I'm dealing with. Do you know so-and-so?" Really get out there and network. Whenever I have problems, I'm scratching my head, I pick up the phone and start calling my network. "Have you seen this? What did you do?"
Reach out to people, reach out to me. I mentor compliance people left and right. Anyone who reaches out gets a response. "What do you want to talk about? I've got 30 minutes on Zoom." Build that network. I've been doing this for 24, 25 years, and I still run into things I've never seen before.
Rhonda:
Same.
Jim:
Without that network, you're isolated. Build it, feed it, keep talking to people. Get together for an impromptu lunch. It doesn't have to be fancy. Just get together and talk. You'll learn a lot. It helped me get this job. The former chief compliance officer at JLL Securities was retiring and called me. "I know you're consulting. Would you be interested?" A month later, I had the offer. That never would have happened without networking.
Rhonda:
That's one thing we do at PerformLine. I host roundtables, one for mortgage, one for banking. It's amazing. You get a synergy of different people. It's not always the same folks, but that one hour to share best practices, network, talk about things that happened. "We got hit with this exam. Be on the lookout for this."
It's critical to your success. I recall being in compliance, and all I had was the people I worked with. We were all experiencing the same thing. One thing I felt was important when I came to PerformLine was to start these roundtables, do them virtually, so folks, regardless of location, can come together quarterly and interact. Then, hopefully, at conferences, they can connect in person. Building those relationships authentically in a virtual space that carries over to physical spaces. I appreciate you validating the importance of networking.
Jim:
It's so important. When it's just you and your coworkers, you get in what I call the echo chamber.
Rhonda:
Right.
Jim:
"This is what we do, and we've always done it this way." Not really being able to… It's not anyone's fault. Everyone parrots, "That's what we do. You're doing the right thing," without realizing there might be a better way.
Rhonda:
"We've always done it this way."
Jim:
Yeah. That's why it's so key.
Rhonda:
I agree. Jim, thank you. This has been a wonderful chat. Thank you for joining us on the Comply Podcast. I hope you'll come back soon, whether for a roundtable, another podcast, or a webinar. We'd love to have you.
Jim:
Rhonda, thank you. Thank you, PerformLine, for having me. Anytime you want me, as long as my calendar is open, I'll be there.
Rhonda:
That sounds great. Thanks again.
Jim:
Thank you.
Rhonda:
Thanks for listening to this week’s episode of the COMPLY Podcast! As always you can find the latest content on all things marketing compliance you can head to performline.com/resources. And for the most up-to-date pieces of industry news, events, and content be sure to follow PerformLine on LinkedIn. Thanks again for listening and we’ll see you next time!
