There is a steady and constant change in regulatory environments that comes with compliance issues. Therefore, best practices have become an important aspect governing how regulators, consultants and community bankers perform their day-to-day tasks. To some extent, coping with the speed at which these changes are taking place becomes difficult to manage. This is mainly because of failure in compliance best practices.
Here is some advice from a standard regulator – the FDIC (Federal Deposit Insurance Corporation) to help banks evaluate, review and improve their business operations. These five suggestions include:
This ensures best practices in fair lending, fulfillment of risk management and efficient services in banks. Through evaluation of obedience and competitiveness, a proper program can be developed.
There is need to review and adopt emerging industry trends that ensure standard practices in consumer protection. There is need for special attention on bank regulations and policies based on public comments about bank services.
Comments about services and reviews serve as an insight into customer satisfaction. On social media, the bank’s reputation is the key to success. Therefore, the challenge is to maintain good practices to protect the bank’s reputation over the internet.
Appropriate personnel in the bank must review and investigate consumer complaints. The findings must be reported to senior management personnel who can take the appropriate action.
There must be support for audit functions that identify risks. The system must be capable of dealing with the complexity and magnitude of the risk. It must have intensity and frequency to match the need of obedience with policies and regulations. Audit functions will include practices like: documentation of reviews, management of reporting and continuous monitoring systems which ensure corrective action.
According to the FDIC, it seems community banks are faring well with an intensive regulatory environment. They have maintained consistency in compliance management and maintaining their responsibilities effectively.
Based on these observations made by the FDIC, community banks provide a lead for regulators on what is required as best practices. These practices are meant to be offered by federal regulators, professionals and consultants. The recommended practices highlight the importance of consensus, communication and coordination.
These are only a few key compliance best practices for banks. There are many more that are constantly changing.