How to Break Down Silos in Compliance Teams and Reclaim Control
In financial institutions and regulated industries, the phrase “silos in compliance teams” signifies inefficiency. It denotes risk and lost opportunity. These invisible barriers exist between departments, systems, and sometimes even individuals. They create a fragmented view of compliance. This fragmentation weakens controls, increases costs, and invites regulatory scrutiny. As firms face growing regulatory complexity and pressure, breaking silos in compliance teams is no longer optional. It is essential for operational efficiency, risk reduction, and regulatory resilience.
Recognise the Hidden Costs of Compliance Silos
The effects of silos in compliance teams are not always visible on the surface. On paper, a firm may appear well-structured, with specialist teams handling AML, KYC, privacy, cybersecurity, and internal audit. But when these groups operate in isolation, the overlaps, contradictions, and compliance gaps begin to mount.
McKinsey estimates that up to 30% of risk management activity is duplicated across departments. In a 2024 Hyperproof survey, 38% of compliance professionals said they spend most of their time on manual administrative work. Even with RegTech in place, 65% of teams still devote more than 20% of hours to repetitive data processing. This happens because of poor integration and outdated systems.
This inefficiency not only increases operational costs. It also creates compliance blind spots. A fragmented compliance function may miss critical risk indicators or respond too slowly to emerging threats. In siloed organisations, 46% suffered a breach. In comparison, only 30 to 36% of firms with integrated compliance and risk systems experienced a breach.
Build a Common Risk Framework
To address silos in compliance teams, the first step is to align on a unified risk framework. Different teams often use separate methodologies, scoring systems, and compliance languages. This makes aggregation, reporting, and oversight far more difficult. Developing a central enterprise-wide framework is crucial. It covers all compliance domains, such as financial crime, data protection, and third-party risk. This approach brings order and consistency.
Leadership must drive this change. A chief compliance officer or head of risk should own the enterprise-wide perspective, supported by frequent cross-functional reviews. Regular collaboration helps teams identify redundant controls, close policy gaps, and align decision-making.
One FTSE 100 insurer recently merged its compliance operations into a single second-line risk unit with domain-specific leads. The result was a 40% drop in duplicated testing efforts and faster audit turnaround times.
Integrate Data at the Core
Effective data integration is essential to break down silos in compliance teams. Many organisations still depend on standalone spreadsheets, outdated tools, and fragmented databases. According to Dataversity, 68% of firms rank data silos as their top challenge in governance efforts.
The solution is to establish a single source of compliance truth. This could be an integrated GRC platform or a federated data architecture that feeds insights into a shared analytics engine. The priority is unified, real-time access to key compliance data across all departments.
Strategic use of technology plays a crucial role. Artificial intelligence can identify hidden compliance risks, analyze both structured and unstructured data, and spot emerging trends. However, automation without integration only deepens silos and creates new workflow bottlenecks.
Shift to Process-Driven Compliance
Eliminating silos in compliance teams also means redesigning how compliance is executed. Too often, teams are structured around narrow domains or compliance policies, rather than holistic processes. For instance, a KYC team may verify identity, while a separate team monitors transactions. Neither team, however, sees the full customer risk picture.
Redesigning compliance around core business processes, such as onboarding, monitoring, or incident management, creates end-to-end visibility. It also encourages teams to collaborate on shared outcomes and streamline workflows.
A major European bank recently reengineered its customer lifecycle processes with compliance checkpoints built in. With workflow automation in place, tasks were routed efficiently across teams. The result was a 30% reduction in onboarding time and improved customer satisfaction.
Encourage a Culture of Collaboration
No compliance transformation will succeed without cultural change. Silos often persist because of misaligned incentives, territorial thinking, or historical habits. Compliance leaders must build a culture that values collaboration, transparency, and shared accountability.
Start with shared KPIs, cross-training, and role rotations across compliance functions. Some organisations now deploy cross-functional compliance squads to tackle complex or fast-moving risks.
Improved communication is also critical. ISACA reports that 68% of senior managers believe poor communication between compliance and IT has caused cybersecurity incidents. This belief highlights the importance of effective communication. Senior managers know poor communication is a major issue. Shared dashboards, open escalation channels, and routine sync meetings help avoid such failures.
Measure and Improve Continuously
Finally, treat the integration of compliance functions as an ongoing discipline. Measure results over time. Track how many duplicated controls are eliminated, how quickly incidents are resolved, and how consistent reporting becomes across the organisation.
With regulators now demanding a holistic view of compliance risk, siloed structures are fast becoming obsolete. Early movers that integrate their compliance operations will gain a strategic edge. They will reduce costs, sharpen risk insight, and improve responsiveness to regulatory change.
Final Thoughts
Silos in compliance teams are more than just a structural problem. They represent a critical risk to business integrity, cost efficiency, and regulatory trust. By implementing shared frameworks, consolidating data, designing around processes, and promoting collaboration, organisations can transform compliance into a strategic enabler.
In today’s complex and fast-evolving environment, breaking silos in compliance teams is not just smart. It is essential for long-term resilience and success.
