Magazine article American Banker

VIEWPOINT: Tech Solution to Reg Problem

Magazine article American Banker

VIEWPOINT: Tech Solution to Reg Problem

Article excerpt

Byline: Andy Greenawalt

Although the financial services industry has experienced some stability in 2010, banks are still faced with significant challenges, such as driving growth, raising core deposits and retaining and acquiring customers.

Adding to these challenges is the ever-present and ever-increasing burden of regulatory compliance that financial institutions of all sizes have to grapple with.

This burden, which I call the compliance tax, poses a real threat to the industry's future.

A recent Gartner report, "Predictions for 2010: Regulatory Compliance and Risk Management in Banking," made the extreme assertion that "by 2013, the cost of regulatory compliance and risk management will have priced Tier 3 and Tier 4 financial institutions out of the market."

This compliance tax can be addressed, and I believe the solution is technology.

The compliance requirements will only continue to grow as the government focuses on regulation to assure the market and the public that the events of the past will not be repeated.

Compounding the increase in regulations is the reality that running a bank in today's environment involves risk - risk that must be addressed to satisfy these growing compliance needs.

Banks have responded by putting manual processes in place, hiring consultants and assigning responsibility to individuals within the institution to create documents, track down papers, obtain signatures, follow up with employees and update spreadsheets. …

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