Regulatory change in the banking industry appears to be on the horizon for 2023. Regional banks are already grappling with an intricate web of state, federal, and international compliance obligations.
However, the likelihood of tightened regulatory scrutiny and the potential introduction of additional regulations is poised to make the environment even more complex. The industry anticipates modernisation of certain rules, while others may be completely overhauled.
Ascent recently explored how firms can stay ahead with compliance.
The company explained that banks need to develop a solid, proactive understanding of their compliance status. Swift and effective response to change remains crucial in ensuring compliance. However, transitioning from a reactive approach to a proactive one could significantly simplify the process of adapting to new regulations.
According to Deloitte, the areas of regulatory oversight that will take precedence in 2023 are:
- Enhanced data governance and reporting: As regulators grow more dependent on data, banks need to prioritise the availability and quality of data.
- Cyber and IT risk: The lack of robust cybersecurity policies and procedures is a rising concern for regulators.
- Consumer protection and financial inclusion: Regulators are expected to maintain their focus on preventing consumer harm in 2023, particularly on the fringes of the regulatory periphery.
A structured compliance regimen not only ensures compliance in all these areas but also enables quick adaptation to changes. Ascent’s recently launched Regulatory Compliance Confidence Scorecard can assist banks in identifying compliance gaps and areas for improvement.
The Scorecard assesses organisational principles such as whether the bank’s legal entities are well-defined, and whether laws and regulations are identified and mapped to these entities, products, and services. By organising business entities against relevant rules and regulations, banks can monitor new enforcement actions or guidance pertinent to their entities. This puts them in a strong position to evaluate new rules in relation to their ongoing business and strategic initiatives.
For example, recent shortcomings in the banking industry have spurred conversations about new regulations or the extension of existing regulations for large institutions to regional banks. A well-structured compliance organisation can simplify the accommodation of any new guardrails, saving time and money, while reducing the risk of non-compliance.
Read the full post here.
Keep up with all the latest FinTech news here
Copyright © 2023 FinTech Global
Copyright © 2018 RegTech Analyst
