Strategies for the Short Term
Sometimes we present, update, or answer a question for someone with whom we
interact infrequently, and as a result, it is difficult to build trust. In these cases,
we should focus on credibility while making sure the messages are relevant.
This list isn’t comprehensive, but below are some key points to keep in mind:
Know your audience
For example, I found out that my manager wanted to hear something important
in each area, only if it was something he did not already know. Lesson learned—
know your audience and be flexible. I had asked well before the presentation
if my subject would be a good one, and all the feedback confirmed it was.
However, I had failed to ask my key audience—my department manager.
Make it Relevant
If you are providing advice to a business line, make sure you put it in terms
that will be relevant to them. For example, most line managers don’t really care
about the history of the Equal Credit Opportunity Act (ECOA), so instead,
focus on what a potential violation would mean to them. Line managers do
care if an error will result in additional work or costs.
You can also make your advice more real if you provide actual examples of
what can happen if the business continues on the current course. If there is a
statutory penalty for noncompliance, consider whether it makes sense to include
that in your discussion. Give examples such as prior exams, formal enforcement actions, or even word-of-mouth from fellow compliance professionals.
Finally, don’t forget to make the subject fully relevant for your audience
by connecting the dots. For example, if you are presenting to the Board
of Directors about the four required elements of the Bank Secrecy Act/
Anti-Money Laundering Program (BSA/AML), you’ll want to explain how
they have complied with each. For example, the first element is having an
appointed BSA/AML Officer, so tie their actions back to the elements by
saying, “The Bank is required to have a BSA Officer. You fulfilled that when
you appointed me back in December.”
Often, a manager will ask Compliance exactly what to do to be compliant and
we can then provide options. For example, we can tell them how to proceed
if they want a low risk solution as well as other solutions that might result
in medium or higher risk.
We add value when we help the business understand the regulatory requirements that apply to their operations, so they can choose how they will
meet those requirements in a cost-effective way.
When discussing issues, gaps, or (gasp) violations, remember the “regulatory
authority hierarchy” (RAHr™):
■ ■ ■ Law and regulation trumps policy;
■ ■ ■ Policy trumps professional opinion (if not, change the policy);
■ ■ ■ Professional opinion trumps industry standard (your mileage may vary);
■ ■ ■ Industry standard trumps personal opinion; and
■ ■ ■ A personal opinion and a five-dollar bill will get you a mocha frappuccino
with your name on the cup at the coffee house on the corner.
If a new requirement is implemented or an issue needs to be corrected,
Compliance has far more leverage to affect the change if the requirement comes
from higher up the RAHr. For example, a $1.0 million system upgrade to comply
with the new HMDA reporting requirements is far more likely to happen than
a $50,000 project to change the font in all letter templates because “serif is more
pleasing to the eye than sans serif” (apologies to the sans serif fans out there).
Anticipate Difficult Questions
When something goes wrong, leaders will want to know what happened
and why. Recognize that you can and will be asked questions that could be
difficult or uncomfortable. When presenting potential issues to management, review your material ahead of time to see if you can answer these
types of questions:
■ ■ ■ How could this happen?
■ ■ ■ What is our exposure?
■ ■ ■ Why is at fault? Who dropped the ball?
■ ■ ■ Why didn’t we prevent this?
■ ■ ■ Will this happen again?
Words Have Power
At a recent doctor’s visit, I told my doctor about some pain I was having. She
said things were probably fine but wanted to run a couple of tests to rule out
anything major—like cancer. Her office would call me only if there were a
problem and I needed to come back in. A couple of days later my phone rang
showing my doctor’s number. I answered and the voice said, “Is this Robert?
I’m calling with some news about your tests.” My heart stopped. I started to
sweat. After another pause, the voice said, “We just wanted to let you know
that everything came back fine.” ARE YOU KIDDING ME?!
There is a world of difference between “news” and “good news”. As a
regular part of our jobs we deliver messages regarding whether a certain
business function is compliant or if regulatory gaps have been closed. Word
choice is critical, and words that should be used sparingly, deliberately, and
with extreme caution, include:
■ ■ ■ “Failed to (insert regulatory
■ ■ ■ “Violation”;
■ ■ ■ “Unwilling”;
■ ■ ■ “Unable”;
■ ■ ■ “Flagrant”;
■ ■ ■ “Blatant”; and
■ ■ ■ “You would have to be stupid to not
already know this.” (I highly rec-
ommend against using this one.)
Some of the go-to words and phrases that have been shared me with over
the years include:
■ ■ ■ “Potential issue”;
■ ■ ■ “Regulatory gap”;
■ ■ ■ “Our testing identified X when we expected to see Y.”;
■ ■ ■ “The purpose is to confirm the factual accuracy of …”; and
■ ■ ■ “We need to determine if we are in possession of the facts before we
identify the next steps.”
This is not to say that the message needs to be “soft” or “indirect”. Rather,
the message should fit the facts, and sometimes there is a big difference
between a “Bat Phone” issue and an “oops, we’ll fix that and move on” issue.
Keeping the language of the message consistent with the purpose of the
message helps to build and maintain credibility.
Speak Their Language
If a line manager calls it a “decline letter” but you’re used to calling it a “notice
of adverse action,” you should understand it means the same thing. What
is more important than the terminology used is that the applicant receives
accurate, timely, and compete disclosures.
Strategies for the Long Term
While it may be hard to build trust when interacting infrequently with others, when you interact on a regular basis, it’s easy to shine. Everything from
the short term applies, plus keep in mind the following: