Access to world markets as a result of widespread use of the internet will mean that customers shop around for three things - net returns (profit less costs and tax), service and security. The use of the internet for financial services will be bandit territory for several years, as new entrants to the market recognise the ease with which they can trick enough people into parting with cash and other investments.

It is wrong to imagine that financial services is only the provision of banking facilities. It is far more than that. It includes custodian services, advice upon and assistance with the purchase of shares, the formation and management of companies, the creation and management of trusts, the management of funds in composite or single accounts, the provision of tip information, lending. In short, almost every way that anyone can think of to put money or assets into a scheme which they hope will either earn money or by which they raise capital.

The widening of the definition of regulated financial services has, in the UK, brought about proposals to regulate lending secured on the borrower's home and in the USA calls for the registration of loan brokers. Many are astounded that, in a highly regulated industry in a sophisticated regulatory framework, the borrower of considerable sums of money is actually left out of the regulatory net.

If the businesses which are regulated do not put compliance at the centre of the business strategy they will find two consequences: first, customers will make an informed decision that they do not want to deal with a financial institution which makes a positive decision, or passively ends up with a policy, to pay lip-service to regulation. They will know because the financial services regulators have already begun to show a willingness to "name and shame" businesses that they think are not putting enough effort into ensuring customer satisfaction.

In financial services regulation, history shows, the whole of Europe follows the UK. The proposal for a super-regulator originated in the USA but no significant progress was made towards that end. However, even though the legislative framework is only recently publicly available in draft, the UK is well on the way to having a de facto central regulator.

One of the results of the proposal for the creation of a super-regulator was that those working for other regulators feared for their career paths and suddenly began to try to outdo each other for regulatory teeth. This led, in part, to the creation of "individual registration." In several regulators, this was rushed into effect because of a ruling that any individual registration scheme already in place would remain after the absorption of the regulator into the Financial Services Authority. Individual registration requires each manager and director who have an advisory or compliance role to be registered with the regulator. The Regulator has a duty to investigate the application and registration is not automatic.

Individual registration has an interesting effect on people: if the company fails in its regulatory duties, managers and directors can lose their registration. If they do, they cannot work in a senior role in a regulated business.

Although the regulators will not admit it, the individual registration is, in fact, a licensing system. Individual registration is therefore a central plank in having regard to compliance issues. Financial Services Act compliance officers are among the ranks of those who must have individual registration in most sectors of the industry. It is notable that money laundering reporting officers do not have to be registered as a result solely of that function.

The overall result is that the compliance officer, who has until now been regarded as a nuisance charged with the primary function of preventing the organisation conducting business may be regarded as a saviour of the licenses of his colleagues.

However, the compliance officer is first in the firing line when systems go wrong. He is the interface of both upward and downward compliance.

Upward Compliance is defined as compliance with external regulatory requirements and Downward Compliance is defined as a management function within the organisation - design, implementation, monitoring and enforcing of compliance systems at all levels within the business. It is downward compliance which has traditionally been the source of friction within organisations. It has not been unusual for compliance directors to leave their jobs when they became frustrated at the refusal of senior managers and even directors to give support to compliance decisions.

The impact of individual registration will mean that failure to support a compliance decision will lead to a direct question mark over the suitability of a person to continue to practise. It may lead to questions as to whether he is a fit and proper person to remain registered and may lead to the removal of his registration, with the consequences that arise from such removal.

All of this means that, for the first time ever, the sales teams will have to listen to what the compliance team say. If the compliance team puts in place a system, and the staff wilfully ignore it, the compliance team will need to have the power to require the personnel department to discipline that person and, in appropriate and serious cases, dismiss them. In theory, at least, the position is that compliance will have power of veto over every new client and every new piece of business. This is clearly not feasible in most organisations. But the scene is set for the compliance team to have a handy argument for use when met with the comment "we will earn a lot of money so let's do it and clean up the compliance later.

The reputational gains in the market place will be as stark as the reputational losses suffered by banks and others who are found to have weak or frequently breached controls. Organisations which are found, on inspection by the Regulator, to have failed to put in place compliance systems as required by the regulator or statute (i.e. failings in upward compliance) will find themselves subject to fines and, in the last resort, loss of corporate licences. The individuals concerned in the management of those businesses will find themselves at risk of losing their livelihood.

And where there are failings in internal controls, that is a lack of effective management of personnel (i.e. failings in downward compliance), the more likely consequence is removal of the individual registration of those who had the authority to make the systems stick.

As the system of individual registration crosses the world, applying to regulated systems in turn, the less well regulated will be noticed by the consumer. The internet will result in a wider homogenisation of charges and legislative measures will, in part at least, result in harmonised tax for the individual (wherever money is earned) rather than of particular jurisdictions. For most investors, therefore, the primary motivation for choosing a particular financial adviser or institution will not be nett gain nor even service (as most will offer either full service or no frills and little in between) but safety. And so, the question of investor protection will be made central to the ethos of doing business in many jurisdictions and compliance with the investor protection rules will be a minimum requirement for businesses wishing to remain alive, not only those who wish to grow.

The effect, so far as compliance professionals is concerned, will be to enhance their status and effectiveness. But against that will be the increased risk. They will be the front line if there are upward compliance failings. And their individual licences will be most at risk. And if there are downward compliance failings, their position will be under attack from the Board of the Institution that charged them with the function of making certain that the company was as secure as it could be from failings in controls.

For compliance officers, this increased status and risk comes down to one thing: money. Annual salaries for compliance professionals in the UK already approach GBP250,000, plus a range of benefits, in some banks. As each financial institution has no choice but to appoint someone at senior level to take effective charge of the function, salary levels across the entire range of compliance jobs will continue to rise.