Performance Improves During
Heavy Scrutiny: A Good Start
DID THE YEAR START OFF AS YOU EXPECTED? I hope so. If it didn’t, here is some news that could help: Compliance professionals are back in the saddle. Proof comes with the news that banks with a less-than-satisfactory compliance rating fell to 6.5 percent by year-
end 2012. I know that is still high, but it is a notable improvement from the
7. 1 percent posted at year-end 2011 (the highest figure since 2007). Talk about
motivation. That’s the way to start a year, especially given how the last five years
have been.

So, my dear compliance professionals, pat yourselves on the back because you made this happen while carrying out the following tasks in this challenging environment:

■ ■ Handling day-to-day risk management by juggling constrained resources, new skill requirements, and competing priorities.

■ ■ Implementing compliance processes for numerous regulatory changes (Take a glance at the Regulatory Developments Tables beginning on page 34. In those tables, there are more than 40 final issuances or proposals that illustrate the major effort required through at least 2014).

■ ■ Balancing examination management and interim activities with regulators in an environment of intensifying and ongoing bank supervision .

I am sure you are asking what drove the improved rating trend. I see three success strategies:

1. Heightened action to control the destiny of the organization, including:

• a risk ranking, prioritization, and dynamic reassessment process driven by internal changes or external developments impacting the industry

• a risk-assessment process that
incorporates more activities and
occurs more frequently to facilitate
effective planning and ongoing
monitoring

Control the destiny
of the organization

As Michael Corleone said in the Godfather: “Keep your friends close and your enemies (data) closer.” I know, compliance professionals do not have enemies, right? Of course not, but often it sounds like we view data as an arch enemy of the Corleone family because the associated management challenges can be frustrating [e.g., Home Mortgage Disclosure Act (HMDA) integrity scrubs, complaint inventory]. However, analysis of data to study issues, identify solutions, and influence outcomes is growing exponentially. In fact, 2013 has been designated as the “International Year of Statistics.” While this pronouncement may not have been directed at the banking industry, it pertains to trends we are seeing, for example:

■ ■ Additional data collection and reporting requirements, (i.e., HMDA, small business data collection required by the Dodd-Frank Wall Street Reform and Consumer Protection Act) the public disclosure of consumer complaint data that identifies subject institution [i.e., public access to Consumer Financial Protection Bureau (CFPB) consumer complaint data-base] and new agency information sharing agreements[e.g., memoranda of understanding (MOUs) or separate information sharing agreements, such as CFPB’s deal with the city of Chicago to combat fraud and predatory lending].