Compliance is a lot to manage. With near-constant regulatory change on top of a mountain of existing compliance responsibilities, the only way to get it all done is to make sure you’re focusing your energy on the right tasks.
Are you spending time on activities and concepts that aren’t pushing the needle towards compliance management success? Here’s a list of five things that might be distracting you from making progress and what you should be doing instead.
1. What you’re doing: Stressing over consumer protection compliance.
What you should be doing: Tracking complaints.
Is your financial institution doing everything it should to protect consumers? You know consumer protection compliance is not just an issue of looking out for consumers because it’s the right thing to do. It’s also a major regulatory priority, as we keep being reminded through agency publications and enforcement actions.
Don’t let stress about consumer protection live rent free in your mind as you wonder if there are problems you don’t know about. Take action! One of the best ways to uncover potential problems is through tracking and analyzing consumer complaints. A formal complaint management process ensures complaints are proactively identified, addressed, and reviewed. It’s a valuable practice for maintaining for customer and member satisfaction, but it also provides data points to help demonstrate consumer compliance strengths and weaknesses.
Make sure your institution has a robust complaint management program as part of its overall consumer compliance management system.
2. What you’re doing: Struggling to find compliance talent.
What you should be doing: Making it easier to transform smart staffers with lots of potential into compliance pros.
Experienced and affordable compliance talent was hard to find even before the Great Resignation. Now it’s even harder.
When you can’t find the compliance talent you need, you have to nurture it yourself—and that takes time. Instead of spending your time fighting for the same few candidates, invest in systems and processes that shorten the learning curve. This goes beyond training to include tools that identify and guide staff through regulatory change, simplifying regulatory compliance speak into plain English.
3. What you’re doing: Playing regulatory whack-a-mole each time there’s regulatory change.
What you should be doing: Creating a change management playbook that includes a single source of truth and implementation plans.
A compliance officer could dedicate all their time just to identifying, implementing, and following up on regulatory change and still need more time. On top of that, there is also managing ongoing, pre-existing compliance responsibilities.
A big mistake financial institutions make when trying to keep pace with regulatory change is treating each change like a new, never-before-seen event. They start at square one with each regulation, developing an implementation plan from scratch.
Instead of reinventing the wheel each time a new change is handed down, financial institutions should draft a change management playbook that standardizes the process. This includes everything from monitoring and identifying changes, assessing the rules applicability, drafting implementation plans, updating policies and procedures, and broadcasting the change to other departments,
This ensures a consistent, easily repeatable approach to managing regulatory change that saves time through simplifying the process.
An efficient CMS has a method to actively monitor and quickly review regulatory change, determine which rules specifically impact the institution, share these changes with other business units involved, and develop step-by-step plans for writing, updating and modifying policies and procedures.
What you’re doing: Wishing senior management and the board better understood the value of compliance.
4. What you’re doing: Wishing senior management and the board better understood the value of compliance.
What you should be doing: Speaking to the board in their language.
Senior management and the board often see compliance as a cost center. They see no reason to invest more resources into compliance if examiners haven’t raised any issues. It’s a frustration for many compliance officers—one that it’s possible to overcome with the right approach.
Try to take off your compliance hat and see things from the board and management’s perspective. While they have a role to play in compliance, their main focus is growth, profitability, and the bottom line, and they must answer to shareholders or members.
The secret to understanding the board and management is to take the time to understand what winning looks like and find a way to make compliance part of that solution. Whether the goal is increased revenue, decreased expenses, operational excellence, new products or services, or customer service excellence, think about how you can frame compliance as a tool to help achieve these goals.
5. What you’re doing: Borrowing policies from peers.
What you should be doing: Drafting policies customized to your financial institution.
Drafting policies takes time. It’s tempting to save time by borrowing a policy from a peer institution, but that comes with risk. You don’t know who wrote the policy, when it was written, and if it’s gone through an exam or audit yet.
While there is nothing wrong in looking at what others are doing for inspiration, there is no substitute for drafting your own policy that accounts for the realities of your institution’s market, product and service offerings, risk tolerance, and strategic objectives.