"It's natural for credit unions to look to us to help them comply. This is becoming increasingly important, as regulators want credit unions to be their own investigators–to investigate and check into the behavior of their own members," the Symitar president said. "That's a big requirement and a lot to ask of credit unions."

That's where companies like Yellow Hammer Software, one of Symitar's sister companies at Jack Henry & Associates, come in.

Jeremy Logan, operations manager at Yellow Hammer, says he and his colleagues in Birmingham, Ala., spend a lot of their time keeping track of

changing regulations and fine-tuning their software in an effort to make the process of keeping up as simple as possible.

"One of the things we really try to provide is an out-of-the-box type solution for credit unions that don't have the staff and experience and really are unsure how to utilize automated software monitoring to best suit their needs," Logan said.

Yellow Hammer software is in place in more than 550 financial institutions across the country, and it certainly has competitors, but even so, "you'd still be surprised how an overwhelming number of credit unions are not using any kind of automated software at all, just paper reports to try to keep up this," Logan says.

That's pretty time consuming, and turning to a core processor for help getting started on the pass to automation is a good start, one well-known industry consultant said.

"The Federal Crimes Enforcement Network says it takes financial institutions about 25 minutes to process one currency transaction report. The number of CTRs filed in 2006 alone was somewhere around 13 million. If there ever was a time a technology solution was needed, it's for complying with the Bank Secrecy Act," said Tripp Johnson of Cornerstone Advisors in Scottsdale, Ariz.

"Since BSA activity is 100% dependent on transaction monitoring, credit unions can find talking to their current core system provider to be a good bet," Johnson said. "While not all core providers have kept pace with the regulatory world, some have done a pretty good job partnering with third-providers that live and breathe compliance."

That would include relationships like Symitar and Yellow Hammer solutions, Open Solutions Inc. and GlobalVision Systems' PATRIOT OFFICER software, and Bankers Toolbox products offered through Fidelity MISER and Harland Ultradata.

Add to that list Wolters Kluwer Financial Services, which says it already has software and services in place at one third of the nation's credit unions.

Wolters Kluwer now has a new solution configured for

the CU market, ComplianceOne, which it says ties operational risk and compliance documentation with consumer and business lending deposit and other transactional functionalities. The idea is to allow CU staff to quickly open new loans and accounts and members to complete transactions quickly while meeting the need for credit bureau access and giving CU staffers enterprise-wide access to member information.

"The increase in complexity from a regulatory, product and delivery channel perspective has driven the need to automate not only the documentation, but to integrate other steps in the transaction process to provide streamlined lending and account-opening transactions," said Sue Pogatschnik, credit union segment manager at Wolters Kluwer Financial Services in Minneapolis.

The need for automation also increases as credit unions process rising volumes of transactions and operate widely dispersed branch networks over the Internet.

"Each credit union is taking a risk-based approach based on how it's doing business today…Whether it operates in multiple locations, whether those locations are in higher-risk geographical areas for identity theft fraud, all these are considerations, along with sheer size," Pogatschnik said.

People, of course, are still involved in the automation process. At Wolters Kluwer, the software and training are developed and offered by former regulators, banking executives and other experts with direct experience in the field, said product manager Heather Czermak.

"These are the people who maintain our professional services division. People who used to do examinations in the field are now helping us automate the tools to help credit unions improve their workflows so they can do things like automatically making sure they're not doing business with someone on a watch list."

And don't expect the demands of compliance to ease up anytime soon. At least, the competition isn't. An Aite Group survey of 17 major banks across the country found that 82% expect compliance demands to be higher in the next three years. Anti-money laundering leads the list of technology implementation needs, the survey found, and business and budget pressures will continue to be a constant.

"The unknowns, however, are substantial," said analyst Eva Weber of the Boston-based think firm. "Where will regulators turn next, and how will they ask firms to respond to risks as yet unknown?

"The universal drivers of reputation risk and hard-dollar cost benefit will continue to support the implementation of technology-based compliance solutions," Weber said, "But at the same time, the compliance bar will move higher as regulators make today's best practices tomorrow's must haves."

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