Why regulated companies fail to hire qualified compliance staff

Even an experienced HR professional cannot always determine whether a candidate truly has the compliance expertise required for a regulated role. Meeting the formal requirements of a vacancy does not guarantee that a specialist can work effectively with regulators, pass a licensing review, or manage AML risks. That is why hiring mistakes are becoming increasingly costly for regulated businesses. In this article, we examine why regulated companies struggle to attract qualified compliance professionals, the warning signs of insufficient expertise, and how to build an effective compliance recruitment process.

Why hiring compliance professionals has become more difficult

A few years ago, most companies approached compliance recruitment in much the same way as hiring for any other role. Today, the situation is very different. Regulators expect compliance professionals to have not only a strong understanding of the law, but also practical experience in risk management, regulatory engagement, and the specific industry in which the business operates.

At the same time, competition for qualified specialists continues to grow. As a result, even companies offering attractive conditions are increasingly facing lengthy recruitment processes, a limited pool of candidates, and the need for more thorough competency assessments.

Growing demand across regulated industries

The expansion of regulatory requirements has significantly increased demand for experienced compliance professionals across almost every regulated sector. The shortage is particularly noticeable in:

• Crypto;
• Fintech;
• Payment institutions;
• Gambling;
• Investment services.

Additional pressure comes from new regulatory frameworks, expanding AML requirements, and international business growth. As a result, companies need professionals who can quickly adapt to evolving regulatory expectations.

Why qualifications matter more than ever

For regulators, simply employing a compliance specialist is no longer enough. Increasing emphasis is placed on the individual's qualifications, practical experience, and ability to make independent decisions in complex regulatory situations.

As a result, companies are increasingly finding that candidates with impressive CVs and professional certifications do not always possess the skills needed for a regulated business. Assessing real competence has become just as important as reviewing experience or academic credentials.

The most common hiring mistakes made by regulated companies

In many cases, the problem is not the lack of strong candidates but the recruitment process itself. Companies often assess compliance professionals using the same criteria as other employees, paying too little attention to their regulatory expertise and practical experience.

As a result, hiring mistakes often become apparent only after the candidate joins the company – during regulatory reviews, licensing procedures, or interactions with banks.

Relying only on CVs and interviews

One of the most common mistakes is relying too heavily on CVs and standard interviews. A well-written CV does not always reflect a candidate's actual expertise, and a successful interview does not guarantee they can perform effectively under regulatory scrutiny.

It is particularly difficult to assess:

• Real experience working with regulators;
• Involvement in licensing projects;
• Practical AML risk management skills;
• The ability to make compliance decisions in complex situations.

Without additional assessment, companies risk hiring a specialist whose capabilities do not match the requirements of the role.

Ignoring AML and regulatory experience

Another common mistake is assuming that general compliance experience is sufficient. In practice, regulators expect key compliance professionals to have expertise specific to the industry in which the company operates.

For example, someone with experience in the traditional banking sector may have limited knowledge of MiCA, crypto compliance, or gambling regulation. Likewise, a candidate with a strong legal background may lack practical experience in building AML frameworks or working with financial regulators.

Hiring for technical skills instead of regulatory judgment

A strong compliance professional needs more than legal knowledge and familiarity with internal procedures. Equally important is the ability to assess regulatory risks, make sound decisions, and communicate effectively with regulators, banks, and senior management.

This practical regulatory judgment is what distinguishes an experienced compliance specialist from a candidate with only theoretical knowledge. For regulated companies, the difference can be critical during licensing, regulatory inspections, and complex compliance matters.

Risks of hiring the wrong compliance professional

Hiring mistakes rarely become obvious immediately after a compliance specialist joins the company. Their consequences usually emerge during regulatory inspections, banking reviews, licensing procedures, or when complex AML issues arise. In regulated industries, such mistakes can affect not only the compliance function but the business as a whole.

Regulatory approval issues

In many jurisdictions, regulators assess the qualifications of individuals appointed to key compliance positions. If a candidate does not meet the required standards or cannot demonstrate sufficient experience, this may affect the licensing process or regulatory approval.

This can result in:

• Requests for additional information;
• Delays in regulatory approval;
• Requests to appoint another candidate;
• Enhanced regulatory scrutiny.

For this reason, candidate assessments should begin well before documents are submitted to the regulator.

Banking and licensing risks

Insufficient qualifications can affect not only relationships with regulators but also interactions with banks and payment providers. During onboarding and periodic reviews, financial institutions increasingly evaluate the effectiveness of a company's compliance function.

If concerns arise about the competence of a key compliance professional, they may trigger additional reviews, delays in the onboarding process, or enhanced monitoring of the business.

Internal compliance failures

An unsuitable candidate increases the risk of mistakes in the day-to-day operation of the compliance function. Over time, these weaknesses may develop into broader internal issues that become apparent only during an inspection.

The most common consequences include:

• Inadequate AML oversight;
• Mistakes in risk assessments;
• Delayed updates to internal policies;
• Weak control over regulatory obligations.

For this reason, the cost of hiring the wrong compliance professional often far exceeds the investment required for a more thorough recruitment process from the outset.

How to assess compliance candidates before hiring

Assessing a compliance candidate should go beyond reviewing a CV and conducting an interview. For regulated companies, it is essential to determine whether the candidate can operate effectively under regulatory scrutiny, make independent decisions, and support the compliance framework over the long term.

A comprehensive assessment should typically include:

1. Verifying regulatory experience – reviewing involvement in licensing projects, regulatory inspections, and communication with regulators.
2. Checking AML expertise – evaluating practical experience in building AML frameworks, conducting risk assessments, transaction monitoring, and suspicious activity reporting.
3. Assessing governance knowledge – understanding of corporate governance principles, allocation of responsibilities, and internal control mechanisms.
4. Evaluating communication with regulators – the ability to communicate professionally with regulators, respond to regulatory requests, and manage compliance reviews.
5. Reviewing cross-border compliance experience – experience working across multiple jurisdictions, international regulatory frameworks, and cross-border compliance requirements.

It is equally important to assess not only a candidate's previous experience but also their ability to apply that knowledge in practice. In regulated industries, the ability to make sound decisions in complex situations is often more valuable than years of experience or professional certifications alone.

Companies that follow this approach significantly reduce the risk of hiring the wrong candidate and are more likely to recruit professionals capable of building effective compliance processes, working confidently with regulators, and maintaining a strong risk management framework.

Why the compliance talent shortage is getting worse

The shortage of qualified compliance professionals is no longer a temporary challenge. Across many jurisdictions, demand for experienced specialists is growing much faster than supply, while regulators continue to raise expectations for key compliance roles.

As a result, companies are competing not only for a limited pool of candidates but also for professionals with experience in their specific industry.

The main drivers of the shortage include:

• Stricter AML and sanctions requirements;
• The introduction of new regulatory frameworks, including MiCA;
• The growing number of licensed businesses;
• Increasing demand for senior compliance professionals;
• The expansion of international business and cross-border regulation.

The situation is particularly challenging for companies operating in the crypto, fintech, and payments sectors. Experienced professionals are in high demand from regulators, banks, consulting firms, and large international groups alike.

For businesses, this means that traditional recruitment methods are no longer sufficient. Finding the right candidate may take several months, while competition for experienced compliance professionals continues to drive up salary expectations and hiring requirements.

As a result, more regulated companies are planning recruitment well in advance, building talent pipelines, and engaging specialist recruitment advisers. This approach helps fill key compliance positions more quickly and reduces the risks associated with prolonged vacancies.

How Structum helps companies recruit qualified compliance professionals

Hiring the right compliance professional involves far more than filling a vacancy. Regulated businesses need specialists who can meet regulatory expectations, support licensing processes, communicate with regulators, and build an effective compliance framework. Structum helps companies identify, assess, and recruit qualified compliance professionals with the expertise required in regulated industries.

Structum team helps clients:

• Recruit AML Officers, MLROs, and compliance specialists;
• Assess candidates' regulatory and AML expertise;
• Verify experience in regulated industries;
• Support recruitment for licensed businesses;
• Advise on compliance staffing requirements;
• Assist with regulatory approval processes where applicable;
• Provide interim compliance professionals;
• Strengthen internal compliance functions;
• Support long-term compliance recruitment strategies.

We work with crypto companies, fintech businesses, payment institutions, gambling operators, investment firms, and other regulated businesses where experienced compliance professionals are essential to maintaining regulatory compliance and business continuity.

If your company is looking to recruit qualified compliance staff or strengthen its compliance team, Structum can help identify the right professionals, reduce hiring risks, and build a compliance function that meets regulatory expectations. Contact us to discuss your recruitment needs and receive practical support in finding experienced compliance talent.