How to Prepare for Post-Election Compliance Changes

//How to Prepare for Post-Election Compliance Changes

Financial services is among the most regulated industries. Oversight occurs on every level of government and compliance mistakes can be incredibly costly. While the nation’s largest banks maintain large teams of compliance attorneys and other experts, most financial institutions must do their best to stay within the lines.

On a global basis, banks spend $270 billion per year on compliance. Some 10 percent or more of most bank operating costs can be attributed to compliance, and some estimates suggest that bank regulatory costs will double by 2022.

Make no mistake, the cost of non-compliance is significantly higher.

Here in America, much may depend upon the outcome of the November presidential election. The uncertainty is making some banking executives nervous, and rightly so.

Change or More of the Same?

Should President Trump remain in office for another term, one might assume that regulatory compliance for financial services would remain on its present course. This seems like a safe assumption, but as Deloitte points out:

“After a decade of global regulatory reforms defined by the financial crisis and misconduct issues, the regulatory environment is changing profoundly. The international consensus on regulatory reform is fraying. Political appetite for globalization is retreating, and trade tensions are mounting.”

The result, according to Deloitte, is that technological change and social concerns, including environmental sustainability, have risen to the top of regulators’ agendas. There is no safety in assuming the status quo will persist.

On the other hand, should a new Democratic administration take control, there is even more reason to expect change. Some observers have gone so far as to suggest that “it seems clear that a new Democratic president would remove CFPB Director Kraninger and replace her with a new Director who will be more aggressive in pursuing the Bureau’s mission.”

It seems that, either way, financial institutions should be prepared to respond to changing regulatory compliance requirements.

How to Prepare for an Uncertain Future

The only way to be prepared for an eventuality that cannot be predicted in advance is to ensure that your team is ready to respond to changes as quickly as they occur. This means being flexible and adaptable.

This can be problematic for those financial institutions that do not maintain large teams of compliance specialists, however, it is possible to overcome this challenge by maintaining relationships with trusted third parties who can be drawn upon for surge capacity and expertise.

%d bloggers like this: