Wolters Kluwers Financial Services on Tuesday released what it says is a new reading of the growing impact of regulatory and risk management requirements on the nation’s credit unions and banks.
The new Regulatory & Risk Management Indicator combines data analysis with financial institution input to provide a barometer on the overall regulatory and risk management environment, the company said.
The Minneapolis-based provider of compliance and audit services and software said the indicator began with a baseline score of 100 in January after a survey of nearly 400 banks and credit unions and then rose to a score of 136 at the end of April with feedback from more than 430 respondents.
The study found that more than 60% of respondents with assets of $7.5 billion or more had hired additional compliance and risk management professionals this year. Unfair Deceptive and Abusive Acts and Practices standards were cited by 55% of those largest institutions as being of most concern in terms of ability to comply.
Wolters Kluwer also found that, among the whole group, 59% of banks and credit unions were most concerned with the CFPB’s RESPA/TILA disclosure and qualified mortgage rules (51%).
The indicator was calculated using 10 factors – seven from financial institutions and three from regulatory data compiled by the company – and said it found that four drove the increase in regulatory and compliance pressures:
- Number of new federal banking regulations.
- Rising dollar amount of regulatory fines.
- Growing amount of resources needed by banks and credit unions to meet regulatory requirements.
- Challenges facing financial institutions’ senior leadership in managing and controlling risk.
“It’s apparent from this first reading that banks and credit unions are more increasingly concerned with managing the growing amount of regulatory change on the horizon,” said Timothy Burniston, vice president and senior director of Wolters Kluwer’s Risk & Compliance Consulting Practice.
“They’re also looking to their executive teams and boards to play a more significant role in helping to mitigate and control the many regulatory and operational risks they face on a daily basis,” Burniston said.