MINNEAPOLIS - What's the number one thing regulators could be doing to make life easier for U.S. banks and credit unions-aside from issuing fewer rules? Making them simpler to understand and offering more clarity around how to comply with them. That's according to nearly a third of the approximately 400 banks and credit unions participating in Wolters Kluwer Financial Services' November Regulatory & Risk Management Indicator.
The company's latest Indicator reports that banks and credit unions want more guidance from regulators and have grown more concerned as 2013 has progressed with their ability to manage compliance obligations and risk. Nearly 80% of respondents in the most recent Indicator showed significant concerns with their ability to stay abreast of regulatory change, comply with it and then prove adherence to regulators. That's compared to just over 60% of respondents showing similar concern levels when the company surveyed 400 plus financial institutions in January.
In addition, the percentage of respondents showing a significant concern with their ability to manage risk across their organization rose from over 50% in January to more than 60% in the current Indicator.
The main Indicator score dropped to 97 in November due in large part to a slower period of regulatory activity over the summer months and during the government shutdown. To calculate the Indicator, Wolters Kluwer Financial Services uses 10 main factors, three of which are based on regulatory data the company compiles and seven of which revolve around direct input from banks and credit unions on their top compliance and risk management concerns.
The combined RESPA/TILA disclosure rule continued to top institutions concerns with the Dodd-Frank Act and Consumer Financial Protection Bureau at nearly 70%. And Qualified Mortgage (66%) and Qualified Residential Mortgage (64%) requirements were not far behind. Regulatory risk remained the top risk management concern (64%) along with asset and liability management (40%) in second place.
"Intense risk-based supervision, together with the rapid pace of regulatory change and heavy sanctions for noncompliance are creating mounting challenges for U.S. financial institutions as we head into 2014," said Timothy Burniston, vice president and senior director of Wolters Kluwer Financial Services' Risk & Compliance Consulting Practice. "The latest Indicator shows just how increasingly difficult, resource intensive, and time consuming it is for financial institutions to get in front of regulatory change and understand their true risk picture."
Wolters Kluwer Financial Services provides more than 15,000 customers worldwide with risk management, compliance, finance and audit solutions that help them successfully navigate regulatory complexity, optimize risk and financial performance, and manage data to support critical decisions. With more than 30 offices in 20 countries, our prominent brands include: Summix®, FRSGlobal, FinArch, ARC Logics®, TeamMate®, Bankers Systems, VMP® Mortgage Solutions, AppOne®, GainsKeeper®, Capital Changes, NILS®, AuthenticWeb™ and Uniform Forms™. Wolters Kluwer Financial Services is part of Wolters Kluwer, a leading global information services and solutions provider with annual revenues of (2012) €3.6 billion ($4.6 billion) and approximately 19,000 employees worldwide.