Academic journal article ABA Banking Journal

The Headache: Coping with the Growing Compliance Burden

Academic journal article ABA Banking Journal

The Headache: Coping with the Growing Compliance Burden

Article excerpt

Our July Aspirin presented two community bankers" views on containing the growing human and financial cost of compliance. Since then we've received additional answers that readers will find of interest. To shore your own ideas on this, email Executive Editor Steve Cocheo at scocheo@sbpub.com, or file your answer at www.ababj.com/blog/2324.html

Remedy 1: It's good for you

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Keith E. Pollek, president & CEO, Fox River State Bank, $97. 6 million-assets, Burlington, Wis.

We have changed our philosophy in the compliance area. In the past we viewed it as something we had to do (not unlike eating your vegetables). Now we look at compliance as something good for the customer and also good for us. So, we now build how we handle compliance matters into our processes, whether that be a new marketing initiative, something in the IT area, or social media. We want our customers to know we are looking out for them, just like a car dealer emphasizing safety features on a new car.

Remedy 2: Committee approach

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Marty Hansen, president and CEO, First State Bank, $39.9 million-assets, Fairfax, Okla. Like many small community banks we have a compliance officer, but she is like every other employee in the bank--required to "wear many hats." To alleviate the voluminous requirements of compliance we took the committee approach.

The compliance officer remains in charge and manages and directs the efforts of committee members. Each member is assigned an area of compliance responsibility, commensurate with expertise. Each is responsible for researching, studying, and initiating discussion on new regs or changes within the committee. And each is expected to help the compliance officer in responding to and implementing the proper policy.

This approach has allowed us to utilize more man hours with less overall impact on any one individual. And we've had positive regulatory response.

Remedy 3: Outsource it!

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Charles G. Brown, III, chairman & CEO, Insignia Bank, $151.6 million-assets, Sarasota, Fla.

We've outsourced anything we feel can be done so effectively. Additionally, we have started to look at internal processing and flowcharts to find any efficiency we can, whether it be to control cost or to improve the customer experience. …

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