Compliance can feel like a race with no finish line. As soon as one task is completed, another priority requires attention, leaving little time to catch your breath.
What are some of the most common sources of stress for compliance officers, and how can they alleviate them? Read on to find out.
1. Too many details to track.
Compliance is a detail-oriented job. From HMDA data and the Community Reinvestment Act (CRA) to exam preparation and vendor management, doing a good job as a compliance officer requires making sure all the tasks are completed accurately and on time, lest a small task become a major compliance problem. A lot of moving pieces feed into the big picture—leaving little time to look at understanding what it all means. You’re too busy sweating the small, yet consequential, stuff.
Related: How to Build a Strong Fair Lending & Redlining Compliance Management System
Solution: Automate compliance management. Manual processes just aren’t practical for a department tasked with overseeing compliance with thousands of rules and regulations. An automated compliance management system (CMS) makes it easy to capture compliance activity, ensure tasks are completed, and reminds procrastinating employees of their compliance responsibilities. An automated CMS simplifies communication and facilitates organization in a way that will make compliance officers breathe a sigh of relief.
2. Evolving regulatory expectations.
Just when you feel like you’ve finally mastered one hot-button compliance challenge, another three always seem to take its place—and no one can agree which one takes priority. Whether it’s a new regulation, regulatory agency head, examiner, or enforcement action against a peer institution, it’s hard to know where to allocate your institution’s limited compliance resources.
Solution: Use a risk-based approach to compliance. Assessing compliance risk can help your institution focus on the areas that contain the most risk. Take the time to measure both the likelihood and impact of a compliance violation (inherent risk). Then assess the controls in place to mitigate that risk (residual risk). Identifying the areas that pose the greatest residual compliance risk will help you decide where to allocate resources.
Considering a financial institution’s ability to identify and control risks is a basic principle of risk-based exams, according to the FFIEC, and examiners are instructed to analyze existing information such as Call Report data, publicly available information, and confidential supervisory information to help identify areas of higher and lower risk when planning examinations. Examiners know not every institution has the same risk profile. That makes applying risk management principles to compliance a smart move.
Creating Reliable Risk Assessments: How to Measure Compliance Risk
3. Keeping up with regulatory change and interpreting gray areas.
Not only are you responsible for identifying new rules and regulations that apply to your institution, you also have to figure out exactly what they mean. Rules like UDAAP (Unfair, Deceptive, and Abusive Acts or Practices) have unclear definitions (especially the abusive part), leaving compliance officers yearning for more specific guidance.
Solution: Leave it to the experts. You could spend 40+ hours a week reading about regulatory compliance and still not have all the answers—yet you only have a small fraction of your time to dedicate to this task.
Some automated compliance management systems are powered by lawyers with years of regulatory experience. They provide prompt notice when regulations or guidance change, letting you know if the update applies to your institution and giving you an implementation plan. It’s a huge time-saver that lets you focus on execution.
4. Not enough internal control testing.
Are your compliance controls effective or are problems falling through the cracks? Internal control testing helps the compliance department assess the effectiveness of policies and procedures. Done successfully, it allows the compliance function to proactively uncover and remediate issues.
Unfortunately, many institutions lack the resources, management support, or data to conduct adequate testing. Other compliance officers worry their testing and review plan isn’t robust enough and requires more specific scoping and better monitoring.
Solution: Embrace automation as a way to provide more time and resources for compliance reviews. Automated audit management solutions can be leveraged for compliance testing, with customized templates, digitized data sharing, and task management that can save time and make it easy to plan and execute reviews.
Don’t get stressed by your heavy compliance workload. Spend a little time seeking out solutions to increase compliance efficiency – it can pay big dividends.
Do these stress-busting solutions sound like pie in the sky? Read 7 Ways to Cut Compliance Costs & Still Stay Compliant for tips and tricks for stretching your compliance budget.
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