Retrospective on 2018’s top regulatory trends
Continuity reveals four disturbing developments that impacted financial institutions during the busiest year on record
NEW HAVEN, CT (January 3, 2019) — Who: Continuity, a leading provider of compliance management systems and expertise, shares its perspective on what lies in store for 2019 in the ever-changing domain of financial services regulation. 2018 saw a number of unusual, unexpected and otherwise surprising developments across the regulatory landscape.
What is Trending:
The experts in Continuity’s Regulatory Operations Center® made four startling discoveries when doing their customary ‘year-in-review’ look back over 2018:
- Regulatory “relief” was anything but relaxing. 2018 saw a record number of regulatory pronouncements issued that affected banks and credit unions. The 265 regulatory pronouncements issued in 2018 reflected a 20% increase from the 220 issued in 2017. On the first business day of 2019, there were 21 items already in the queue for processing by the Regulatory Operations Center.
- Banks and credit unions are both still spending too much on compliance. Because regulatory relief didn’t reduce regulatory activity, the work of managing regulatory change remained burdensome and pervasive. A number of “red flags” across multiple organizations shows that compliance operations failed to gain efficiency. Most FIs still rely too heavily on human effort and too little on technology adoption, resulting in inconsistent outcomes flowing from duplicative or redundant business processes.
- Enforcement actions with fines and penalties against individual directors and officers rose sharply. An increase of 500% over the prior year included a dramatic spike in the number of actions taken against individual officers for wrongdoing, even in cases where no action was taken against their financial institution. The trend of director-focused actions persisted, with fines escalating into the hundreds of thousands of dollars per incident.
- Changes in executive role expectations for risk and compliance officers are transforming the skill sets needed for peak performance. Today’s regulatory environment demands incumbents with modern proficiencies, in areas like data literacy, business intelligence and technology implementation and integration. The domain is no longer ruled by box-checkers or grammar-sticklers, and even those with MBAs or JDs now find themselves falling behind their more tech-savvy peers who understand how to leverage and rely upon regulatory technology and business intelligence tools.
About Continuity
New Haven, Connecticut-based Continuity is a provider of regulatory technology (RegTech) solutions that automate compliance and risk management for banks, credit unions, mortgage companies and fintech firms. By combining regulatory expertise and cloud technology, Continuity provides a proven way to reduce regulatory burden and mitigate risk at a fraction of the cost. Continuity serves hundreds of financial institutions across the United States and its territories. Continuity’s risk and compliance product set includes RiskAdvisor, RegAdvisor® Pro, RegAdvisor® State, RegControls™, ControlsBuilder™, Policy and Procedure Management and VendorManagement. For more information, visit www.continuity.net.
