Compliance control systems in financial institutions: a contingency approach

Fatima Zahra El Arif and Amal Tahiri

Journal of Financial Regulation and Compliance, 2025, vol. 33, issue 3, 425-450

Abstract: Purpose - This study aims to examine the relationship between the structure of compliance control systems and their effectiveness in financial institutions, considering the moderating effects of organizational context. Design/methodology/approach - Using the contingency theory, a model was developed and tested using structural equation modeling on data collected from 271 compliance professionals in Moroccan financial institutions. Findings - The structure of compliance control systems directly impacts their effectiveness. This relationship is moderated by organizational size, structure and perceived environmental uncertainty. Larger institutions and those with mechanistic structures show weaker relationships between system structure and effectiveness, while organic structures and higher perceived uncertainty strengthen this relationship. Research limitations/implications - The study provides a contingent framework for analyzing compliance control systems in financial institutions within their context. Practical implications - Findings suggest that compliance managers should tailor control systems to their specific organizational context, considering factors such as size, organizational structure and environmental uncertainty. Originality/value - This study extends the contingency theory to compliance control systems in financial institutions, an area previously underexplored in management control literature.

Keywords: Compliance control systems; Contingency theory; Organizational context (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jfrcpp:jfrc-07-2024-0131

DOI: 10.1108/JFRC-07-2024-0131

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