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Modern Methods Improve Regulatory Change Management

By Pam Perdue

Regulatory change wreaked havoc long before the Dodd-Frank Act. Every quarter since 1975, there have been 60 to 80 regulatory changes affecting banks. That number holds steady regardless of which party controls Congress or the White House, across cycles of regulation and de-regulation.

Yet despite this predictable velocity, and advances in technology, the average bank still manages change the old-fashioned way: by throwing more people or more dollars at it. But traditional methods no longer work. Why? As the Banking Compliance Index illustrates, there are more pages to read, more rules to follow and more enforcement actions being levied than ever before.

The Compliance Change Cycle
When a new or changed regulation is issued, a mistake at any of the critical stages in the chart can spell trouble. Institutions who try to cut corners, tinker with steps out of sequence or omit documentation of progress can find themselves running afoul of the rules.

Traditional Methods
Errors and oversights are inevitable with high volumes. At each step, risk is introduced. You don’t need a COSO cube – just common sense – to understand the risks of manual methods.
If this cycle had to be done infrequently, you could painstakingly address each step. But when the cycle is repeated 60-80 times a quarter, that’s a change nearly every day. It’s no wonder you are scrambling to keep up.
But never fear: by modernizing your methods, you can ensure that regulatory change management runs smoothly regardless of the volume or velocity you face.

Modern Solutions
Modern regulatory change management systems alleviate much of the burden of this process. Leveraging technology, these systems perform many of the tasks that before, only human hands could handle. Refer to the second chart to see how each stage of the process is improved when it is standardized and automated.
Taking a methodical, high-tech approach to regulatory change management is no longer optional for institutions that need to stay competitive. Regulators demand that any compliance management system have a facility to effectively and accurately process new regulations and incorporate them into business processes. Reliance on obsolete tools or antiquated techniques is folly: it takes more time, costs more money, and leaves gaping unmitigated risks. Applying advanced techniques and investing in more modern tools allows smart bankers to solve this problem once instead of continually losing time, money and peace-of-mind in the compliance vortex. Upgrading your approaches to regulatory change management should be a topic for your next board agenda.■

Pam Perdue, is is executive vice president of regulatory operations at Continuity.


Posted on Monday, September 14, 2015 (Archive on Sunday, December 13, 2015)
Posted by Scott  Contributed by Scott
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