In an environment where we talk about “Sales Culture,” “Lending Culture,” and “Marketing Culture” there seems to be no voice for a “Compliance Culture.” After all, don’t we create “cultures” for those items that benefit us the most? How do you establish the value or benefit for a non-earning area? Believe me, when you look at the facts, it’s not a hard-sell.
For any idea to flourish in an organization, management must get behind it. Why should management support a Compliance Culture? It’s very simple: the Compliance Risk Rating in regulatory examinations has a direct effect on the Management Rating.
Getting management acceptance of a Compliance Culture is only one stop on this very difficult journey. Staff attitudes should also be re-oriented to a better understanding and acceptance of regulations and compliance with such. The subject of compliance should be presented to staff on the same level as cross-selling or security.
Regulators demand and expect a Compliance Officer that’s experienced, knowledgeable, and with sufficient authority to perform their duties. This is no longer a title that can be “thrown under the pile” of responsibilities for already overworked staff or junior officers. We should all remember that this position is mandated by federal law (the USA PATRIOT Act). Regulators take a dim view of institutions that pass the Compliance Officer title around like a game of “hot potato.”
We tend to fear things less that we understand and education promotes understanding. Training continues to be viewed on the basis of “have to” as opposed to “want to.” There are many opportunities for obtaining materials, given the resources and networks available to us through leagues, chapters, and professional groups. There are so many areas beyond those items that are required (BSA/OFAC for example) that explain the “whys” of compliance to staff who view it as a “big dark room.” In most cases the material is free. It’s simply a case of allocating time.
Is developing a Compliance Culture worth investing the time and cost? We live in a constantly changing regulatory environment and have seen the birth of an additional agency that affects the very regulations that we follow. Considering the increased regulatory scrutiny on financial institutions, it’s just smart business. At a time when the government is pushing “transparency” and consumer “watch-dogs” microscope all of our activities, none of us can afford negative public perception due to violations or resulting penalties. It’s the cost of doing business in the 21st Century.