Given recent headlines about regulators cracking down on insufficient risk management programs, many banks and other financial institutions are taking a closer look at their own risk and compliance management practices.
A recently released regulatory survey from The Risk Management Association, a non-profit professional group, revealed some of the biggest challenges banks are facing in managing risk. The survey focused on six categories, including enterprise risk management, compliance, and the regulatory environment, among others.
Let’s take a look at some of the key findings.
The institutions surveyed ranked the risk areas they found most difficult to manage as:
These risk categories align with some of the primary program components that regulatory agencies examine. In the recent case of the Office of the Comptroller of the Currency (OCC) ordering USAA Bank to correct unsound banking practices, the OCC found a number of gaps in the bank’s risk management efforts, including:
The fact that institutions struggle with the risk categories that fall under regulatory scrutiny indicates a pressing need to align organizational risk management practices with compliance requirements.
More than half of all respondents reported increased spending on regulatory compliance in 2018. Approximately a third felt that regulatory demands had a negative impact on product flexibility and the capacity to meet consumer requests.
Regulatory burden also proved a major concern at the management level. Bank directors cited their top challenge as “keeping up with the ever-changing regulatory environment.”
Financial institutions need a comprehensive system for risk and compliance management to effectively monitor and manage risk and keep up with the pace of regulatory change.
For more than a decade, Quantivate has been partnering with financial institutions to help them develop an effective framework for governance, risk, and compliance (GRC). Our range of software and services helps organizations reduce risk, boost performance, and drive smarter decision-making.
The products in the Quantivate GRC Software Suite can be used alone or together and include: