MINNEAPOLIS, Minn—Concerns over compliance and risk management among credit unions and banks is up nearly 30% from two years ago, according to a new survey released by Wolters Kluwer. The company’s Regulatory & Risk Management Indicator began with a baseline score of 100 in January 2013, when Wolters Kluwer Financial Services surveyed nearly 400 U.S. banks and credit unions around their ability to manage compliance obligations and risk. It has risen to a score of 128 following the company’s latest survey of more than 300 financial institutions in August. Among the findings: 72% cited ongoing challenges in complying with changing regulations, with concern over the CFPB’s Truth in Lending Act/Real Estate Settlement Protection Act requirements remained high, with three quarters of respondents noting it as a significant challenge.
Other findings by Wolters Kluwer:
* An area of increasing unease is in the CFPB’s new Home Mortgage Disclosure Act reporting requirements, having risen steadily from 45% to 63% between January 2013 and August 2014. In the most recent survey, respondents cited specific concern over the sizeable new set of data fields, the challenges of accurately populating those fields, and updating their own institutions’ technology systems to handle the changes.
* Overall concern over ability to manage risk has grown, with 44% of respondents citing regulatory pressures as a main obstacle in managing risk at the organizational level. Sixty-three percent cited regulatory risk as their top risk concern, followed by IT risk (45%), fair lending risk (38%), and fraud (36%).
* Fewer than one-in-five respondents characterized their organizations as having a comprehensive, strategic enterprise risk management program in place. Another one in five indicated that they understand and manage risks, but have no formal process or program in place. The remainder were either somewhere in between these extremes (44%) or “not sure” (16%).
* One in three respondents indicated they have hired staff or transferred staff from revenue-generating roles to help manage growing risk and compliance requirements in the past 12 months.