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Preparing for the Future of Compliance

By:  Jeffery Schmid, Director of Compliance and Management Services

It has been five years since FIPCO started the ShareFI services and things have come a long way in compliance management. No sooner did our Shared Compliance Officer and consulting services get started, than we were met with a pandemic and a new way of managing regulatory compliance as we knew it. While community banks were adjusting to remote work and electronic delivery of loan and deposit forms, the volume of transactions continued to soar, new regulatory interpretations were delivered, and the industry was faced with large scale changes, some of which happened overnight. Back then, things really took a toll on bankers, and compliance professionals were no exception. So, it was no wonder that when things began to return to normalcy, we began to see attrition in compliance officers and compliance staff. This dynamic shift in staffing has hit compliance management even harder than most banking positions due to the limited number of staff assigned to this role. 

While larger banks need and can afford an entire compliance team, most small community banks rely on just one or two individuals to carry the regulatory burden. It is not like a bank can just hire anyone off the street these days. They need to acquire and retain professionals who require continuous education, an analytical mind set, and a great degree of diplomacy. Certainly, they are specialists in their field and today they are even harder to come by.

Over the last five years, our ShareFI team has experienced both the highs and lows of compliance management with our clients. Whether it was collaborating with community banks on regulatory orders, filling gaps in compliance staffing, assisting with compliance examinations, or simply providing remote support services, one thing for certain is the need to plan for the future of your compliance program. And it all starts with staffing. Even examiners are now asking the question “what succession plan does the bank have for compliance management?”  This is because they have recently rolled out their own succession plan with a new batch of compliance examiners. 

Planning for your future compliance officer and compliance staff should be happening now or at least five years before any planned exodus. As mentioned earlier, these compliance professionals are specialists in their field and the education alone takes many years to absorb all the nuances of regulations. Not to mention, a good succession plan includes a handholding through the next examination, while your current staff is still on board. Management should be looking internally for potential candidates who are seeking to advance their banking career and desire to play a larger role in the overall business strategy of the bank. And do not forget, your Wisconsin Bankers Association has numerous training and networking opportunities to help you mentor these candidates.

Five years ago, FIPCO had a vision to anticipate the future of compliance management (we just never envisioned a pandemic). Through its Shared Compliance Officer roles, we have been successful in delivering value-added solutions, including filing the gaps and helping bank management develop future compliance officers. While an outsourced, shared solution may be a good fit for your organization, not all banks are alike and having a future compliance officer candidate identified now may prove to be a brighter future for your compliance program.