5 Top Regulatory Compliance Concerns for Financial Services

By Robert Half April 15, 2015 at 3:53pm

Maintaining regulatory compliance is clearly a top and ongoing concern for financial services organizations. But recognizing the issue commonly proves far easier than successfully managing it.

To provide insight into the financial sector’s top regulatory compliance issues, we asked Richard White, division director of Robert Half Management Resources in San Francisco, to explain what the stakes are if your business is found noncompliant — and how to avoid that possibility.

Richard notes the current environment for financial institutions is one of continuous testing, which makes it even more important — and challenging — to keep pace with compliance mandates. “As soon as a bank passes one test, it may face another test right around the corner,” says White. He points to the twice-yearly Dodd-Frank Act Stress Tests as an example.

Issues of great concern for financial institutions

According to White, financial institutions should take particular care to stay on top of the regulatory compliance requirements and changes below, each of which can have significant potential financial ramifications:


One main purpose of the USA PATRIOT Act is to strengthen U.S. measures to prevent, detect and prosecute international money laundering and financing of terrorism. Failure to comply with the USA PATRIOT Act could result in fines that reach billions of dollars.

For quick reference, the Financial Crimes Enforcement Network provides on its website an overview of the sections of the Act that may affect financial institutions.

2. Comprehensive Capital Analysis and Review (CCAR)

As of March 2015, the Federal Reserve can rule that your organization is undercapitalized. In a worst-case scenario, this could sink your share price catastrophically if investors panic and jump ship, says White.

See the Federal Reserve website for more information on the CCAR 2015 Assessment Framework and Results.

3. Financial Industry Regulatory Authority (FINRA)

Fines for Ponzi scheme detection and other issues could cost your financial services organization $100 million in fines — or more.

For an overview of FINRA rules and to access the FINRA manual, go to the FINRA website.

4. Consumer Financial Protection Bureau (CFPB)

The CFPB, which is responsible for consumer protection in the financial sector, was established as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Failure to comply with CFPB rules can result in penalties above the $10 million mark.

5. Office of the Comptroller of Currency (OCC)

Financial institutions, including national banks and federal branches and agencies of foreign banks, that do not comply with OCC regulations can face millions of dollars in penalties.

For more detail on several of the compliance matters listed above, see the Guide to U.S. Anti-Money Laundering Requirements, Frequently Asked Questions from Protiviti.

Keeping pace with change

Vigilance is mandatory to help ensure compliance, says White: “Compliance needs to be a priority throughout the institution. Controls and sound business systems must be in place, and all departments need to stay in communication with each other so that the left hand knows what the right hand is doing.”

In addition to regularly monitoring and analyzing internal controls and financial systems, and assessing potential risks, White recommends that financial leaders take time to:

  • Educate staff. Whether through regular meetings or weekly email blasts, keep everyone who needs to know about regulatory changes up to date. Provide regulatory compliance training, and make sure employees also have access to resources such as industry publications and webinars on relevant topics.
  • Invest in expertise. This includes hiring compliance officers and internal auditors. Engaging specialized consultants with deep expertise in regulatory matters can also help organizations to manage compliance initiatives more effectively.
  • Learn from others. Keep an eye on competitors: Adopt their best practices and avoid repeating their blunders.

Noncompliance can damage your organization’s reputation as much as its bottom line. Keep your organization in line by identifying and managing risks, staying current with new legislation, keeping open lines of communication with your team, and hiring compliance experts.

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