During this period of unprecedented turmoil in the financial services industry, the attention of boards of directors and financial services executives is understandably focused
on ensuring the financial health of their organizations. However, the importance of maintaining compliance with myriad laws and regulations applicable to the industry is as critical as ever and, in many ways, has never been more challenging.
Consider some of the issues currently being experienced by the industry:
- Regulatory examiners continue to pursue enforcement actions in areas as varied as Fair Lending and Anti-Money Laundering compliance.
- Privacy considerations continue to create significant risks for organizations of all types.
- Regulatory agencies increasingly expect organizations of all sizes to have sophisticated, well-designed programs to identify and address compliance risks on a proactive basis, rather than simply addressing violations as they are identified by examiners.
- Compliance managers are expected to address significant new and revised laws and regulations, often with fewer resources as a result of recent staff reductions.
- Financial services companies that have elected to become bank holding companies face potential significant challenges in adapting to a new regulatory regime.
In addition to these considerations, the industry faces the likelihood of significant regulatory reform in the months and years ahead.
Given the regulatory environment and the pressure most financial services companies are feeling to control costs, identifying and managing compliance risks effectively and efficiently should be an institutional priority.
Challenges and Opportunities
Financial services companies have developed countless policies, procedures and processes that often treat all requirements as if they are of equal risk, may impose redundant requirements on the business and may not exploit the benefits of technology. Thus, the cost of compliance continues to escalate amid growing concerns about the benefits of these costs.
Our Point of View
We believe that the keys to an effective and efficient compliance function are:
- A robust risk assessment process that results in the efficient allocation of resources
- Risk-based compliance monitoring that appropriately balances the efforts and reduces duplication among the business units, compliance and internal audit
- Continual validation of the effectiveness of technologies used to support the compliance effort
How We Help Companies Succeed
Our Regulatory Consulting practice helps organizations solve these challenges using proven, creative and costeffective solutions. Our professionals are former regulators and industry executives with practical, firsthand experience in designing, managing and evaluating the effectiveness of world-class compliance programs. Our proprietary Protiviti Compliance Framework provides companies with a model to identify, assess the risk of, manage, and monitor compliance with all types of compliance risks effectively and efficiently. In addition, our Regulatory experts assist clients in responding to regulatory inquiries and addressing regulatory enforcement actions, conducting regulatory (including money laundering) investigations, performing reviews and audits of compliance organizations and of specific laws and regulations, and conducting compliance-related training.
A mortgage lender was the subject of a multimillion dollar regulatory enforcement action alleging that the company had engaged in predatory lending practices.
We were engaged to assist the client in reviewing nearly 30,000 mortgage loans and applications to identify consumers eligible for reimbursement under the terms of the enforcement action. We also assisted in rebuilding the client’s consumer compliance program to prevent recurrence of the alleged problems.
The company received very favorable feedback from its regulator regarding Protiviti’s involvement in the project. In addition, our team was able to identify and assist the client in winning approval for a series of modifications to the reimbursement methodology, which saved the client more than $2 million.