ABA Banking Journal - May/June 2016 - (Page 36)
Seven ways banks create a culture of compliance
BY TINA OREM
hrow a large pebble onto the main entrance of
an ant hill, and you'll probably witness something
amazing: dozens of ants will appear and magically
coordinate to remove the pebble, which is
undoubtedly hundreds of times heavier than they
are. Best of all, they'll do it without needing exploratory
meetings, draft memos or PowerPoint presentations.
It may seem like a trivial situation, but when that pebble
is "compliance" and the ants are "bank employees," their
exertion suddenly becomes more meaningful. After all,
it's not the pebble's weight that's most fascinating-it's
the sheer complexity of the coordination to deal with it.
How ants pull this off is a mystery banks can relate to. For a
long time, compliance in the average bank was a sequestered
activity handled by a relatively tiny group. But today, carrying
the regulation pebble requires a much more orchestrated,
strategic effort from the entire organization. And for most
banks, that requires a big shift toward creating a culture of
compliance-that is, coordinating more ants to lift the pebble.
It's a heavy one, too. A full 73 percent of bank executives
in the Accenture 2015 Global Risk Management Study
said infusing risk culture in their organizations was
critical or important, yet only 11 percent said they had
a consistent risk culture. And 37 percent said they
believed human nature is stopping it from happening.
We asked compliance experts how banks can reshape
their cultures so compliance goes from a back-office
task silo to a pervasive set of behaviors and beliefs.
Here are seven things they said make a difference.
Put compliance experts on the IT and HR
teams, and other important places.
One of the first steps to creating a culture of compliance
is to ensure that compliance people are embedded in
Learn more about a culture of compliance by attending the ABA Regulatory
Compliance Conference, June 12-15 in San Diego. aba.com/RCC
ABA BANKING JOURNAL | MAY/JUNE 2016
the bank's organizational machinery. Cara James, SVP
and director of compliance at Arvest Bank in Tulsa, Okla.,
sits on her bank's IT steering committee, for example.
"I am a voting member of a group that makes decisions around
IT projects and prioritization in our organization, because the
need is there for a compliance perspective as we make decisions
on where our IT dollars and resources are going to be applied,"
she says. Bank teams and committees focused on government
relations, strategic planning and special initiatives should also
include compliance subject-matter experts, she added.
"Really the best way to make this happen is to become
very business focused, to understand how the bank
makes money, and to really align compliance efforts with
business efforts so it becomes more seamless," says
James, who has worked in compliance for 24 years.
"It's about developing relationships with management at all levels
of the bank, and then using those relationships to take advantage
of opportunities to ideally, in person, communicate and educate
your business. That's really where it starts," she adds.
Compliance leaders often don't have hiring and firing authority,
says Greg Hahn, the national practice leader for regulatory
compliance services at consultancy firm Crowe Horwath
in Grand Rapids, Mich. (ABA endorses Crowe Horwath for
compliance management solutions.) But part of building
a culture of compliance is working with HR to establish
guidelines for recommending dismissal or discipline on
compliance-related matters and having the confidence that
senior management will back it up when needed, he said.
the message from the top
(and from the right address).
To create a culture of compliance, bank leaders also must
explicitly tell teams that compliance is everybody's responsibility
and that it should be taken seriously. Email is often the
most efficient way to send that message, says Lyn Farrell,
managing director at Treliant Risk Advisors. But that email
shouldn't be from the head of compliance, she says.
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