by John Moniak and Maureen Fassbinder

For some financial institutions, revisiting issues of compliance may seem like déjà vu all over again. (“Wasn’t testing performed just last year?!”)

However, business isn’t static. Regulations change, regulatory focus changes, and most importantly your institution’s focus may have changed. Consequently, when a compliance program has been up and running awhile, it is critical to revisit your risk assessment and the entire compliance process, at least annually or when major changes in your institution occur.

Here are eight events that should prompt you to revisit your institution’s program, review risk assessment, and confirm seamless compliance:

1. Changes in management. When changes occur, it’s important to ensure a continuity of duties. Major line-level changes may have an impact on how your institution complies with regulations. 
   
   
2. Increased turnover. High turnover, particularly in front-line employees, can jeopardize compliance. Along with risk assessment, training must be revisited to safeguard processes, as well as your culture of compliance. 
   
   
3. New product introductions. With any new products come new risks. If your institution launched new products without the involvement of compliance, there may be hidden headaches. Always include compliance in any product development and marketing.
   
   
4. New branch locations. Adding a new territory with new employees who are serving new customers is a formula that calls for careful risk assessment. Inter-branch communication is also a crucial factor that affects compliance and should be actively addressed.
   
   
5. Internet banking. Offering new account services through the Internet deserves the utmost attention of compliance in order to provide the fast and compliant customer service management expects from the Internet.
   
   
6. Regulatory changes. Keeping up with changes is imperative. Even minor ones can affect your institution’s product delivery process.
   
   
7. Regulatory exams. Nothing makes an examiner crankier than repeated violations. If you’ve experienced an exam and it uncovered weaknesses, they must be corrected before your next exam. In addition, overall exam results may change the focus of your testing program.
   
   
8. Technical difficulties. As institutions rely on more automated ways of transacting business, finding solutions for technical violations becomes more critical. One minor flaw can be repeated to create a major compliance headache.

Staying on top of change

Institutions must view compliance as a business process that requires ongoing management, one that includes updating the skill sets and capabilities of compliance professionals.

More resources than ever before are available to help compliance professionals stay current, including Internet sites, audit software, seminars, schools, and other training. However, the best compliance professionals aren’t just technically proficient in regulations. They are also knowledgeable in managing risk. They assess the root causes of problems and implement changes to fix those problems—persistently. 
 

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