Since the economic downturn and the Dodd-Frank legislative response, proper attention to most every risk in banking tracks back to compliance.
Whether the challenge is anti-money laundering compliance or cyber-attack risk, vendor management or insider and affiliate loans, or fair-lending compliance and deposit agreement disclosure, the threshold question in safety and soundness or compliance examinations and internal audits is whether the board and senior management adequately managed risks by committing the necessary resources to ensure there is appropriate enterprise-wide risk management and that the bank satisfies its regulatory compliance requirements.
The elevation of compliance and corrective action over most other bank matters has often resulted, by default, in less attention by community bank boards across the country to growth and expansion of products and services. Additionally, the increasingly higher bank-by-bank infrastructure cost of expanding compliance expertise tends to undermine the continued viability of community banks as the cornerstone of U. S. small business lending.
Is there an alternative to the current compliance cost spiral?
Read the article here.