by: Marvin M. Garland, Chief Operating Officer, LEVERAGE
Departmental and institutional compliance reviews have never been easy. And today, with regulators demanding that financial institutions incorporate in-house risk assessments, compliance reviews have become even more complex and time consuming. That is why a risk-based compliance review for credit unions should be considered in addition to the traditional compliance review.
As LEVERAGE researched among credit unions of various asset sizes on how to bring value and to benefit them in compliance, it repeatedly heard how many credit unions struggle to manage, organize, identify, interpret, and implement new and changing regulations. Everyone wants to do it right the first time to reduce unnecessary expenses and mitigate risk, while at the same time provide excellent service to their members.
This is an important component to minimize the chances of investigations, litigation, and costly penalties. Risk-based compliance includes these key elements in successful compliance programs:
- Review key products and services; organize by program and regulation — to save time
- A risk-assessment matrix is helpful and makes it easier to assess risk and assign risk ratings for key requirements, which also helps avoid the investigations, litigation, and penalties associated with noncompliance
- Risk-assessment materials should be accurate and effective
- Up-to-date citations help to understand and comply with relevant regulations
- A compliance review process, relevant regulations, and requirements checklist is also helpful
Many credit unions speculate whether they will be able to find time and resources to comply with accurate risk assessment to mitigate risk as regulations change. One important factor credit unions will need to consider is how to keep their policies and procedures up-to-date and accurate, along with how quickly they can implement change by product mix, charter type, and asset size.
Automating the policies and procedures process can make it easier and more manageable. This becomes increasingly important to have time remaining to serve members and deliver state-of-the-art products and services. For credit unions, remaining competitive means keeping up and keeping current. Automated compliance solutions can be extremely useful to help save time and unnecessary costs – therefore remaining on the cutting edge of technology and regulatory change.
Marvin Garland is the Chief Operating Officer for LEVERAGE, the LSCU Service Corporation. LEVERAGE is a business services provider that has a revolutionary ePurchasing platform and a contract management system in Ventelligence, an automated compliance execution powered by ComplyTrac, as well as many other solutions. Visit myleverage.com to learn more about how credit unions have leverage in the marketplace. You can follow LEVERAGE on Twitter or LinkedIn.