Pub. 6 2015 Issue 3

www.wvbankers.org 32 West Virginia Banker By Scott Daugherty, Compliance Alliance Compliance – Burden or Opportunity? Scott Daugherty is President & Gen- eral Counsel of Compliance Alliance. Owned by 24 State Bankers Associ- ations, Compliance Alliance moni- tors the needs of bankers to create, update and continually provide the most sought-after banking regulation resources in the industry. To learn how to put Compliance Alliance to work for your bank, call (888) 353-3933, visit compliancealliance.com, or email info@compliancealliance.com. I often hear bankers lamenting how com- pliance is a burden that is forcing banks to merge or sell. I find this to be to be a disturbing thought and one I wholeheart- edly disagree with. As I travel across the country, talk of rising cost of complying with all the new regulations and having to add to the compliance staff is prevalent at conventions from coast to coast. I view this as a time of opportunity rather than a riddle that can’t be solved. Compliance Alliance works with banks in thirty-six states and as I visit these states I have talked to bankers at community banks that were founded in 1820, 1825, 1835 and many other banks that are in excess of 150 years old. Hearing the sto- ries about the history of these institutions makes me think about the major events that these banks have survived and thrived through. They have been through: • The Battle at the Alamo • The Financial Panic of 1837 • The Mexican War • The Civil War • The stock market crash and panic of 1873 • The Financial Panic of 1893 • War World I • The Great Depression • War World II • Korean War • Vietnam War • The S & L Crisis As a banker, I find it amazing the number of banks across the country that have gone through these events and many other life altering and changing events. I know I would not want to be the banker whose bank went through all of those trying times and then I gave up because of Dodd- Frank. This made me contemplate our current challenges in banking and how banks can adapt and thrive in spite of the obstacles placed in front of them. I firmly believe that we have an opportunity to revamp and reevaluate how banks handle the compliance and regulatory functions. As bankers we are accustomed to adapting and overcoming challenges that we and our communities face. We have dealt with changes to every area of our banks, the way we open accounts, process checks, make and collect loans, trust services, mobile banking, ATM’s and many, many more ways banks have evolved and thrived. Now it is compli- ance’s turn to adapt, thrive and become more efficient and effective. But the compliance function has largely remained unchanged in how it operates within the bank. Compliance is such a vital area to the bank, it is as important as any other area of the bank. I know it isn’t a money maker but it is a money saver. Think of the fines and penalties you see banks being hit with every day. How many loans will your bank have to make to make up for a $250,000 fine or penal- ty that the bank suffers because it hasn’t invested in the compliance area? I cringe when I hear people refer to com- pliance as the people that say no all the time. If the answer is no all the time then I would argue the wrong question is being asked. Banks need to change their culture to include compliance in the planning and early stages of initiatives. Ask how can we get this done or what options do we have to work with this customer or how can we offer a better product? Compliance should be a part of the strategy of the bank as compliance touches on everything a bank does. This is the perfect time to focus on how to make your compliance area more effi- cient and effective. An important part of this is using resources that will give your compliance officer more time to work with staff to ensure the bank is staying in compliance with the regulations, guidance and rules that we face. Your compliance staff needs to monitor and evaluate the bank’s processes, train and coach staff on policies, procedures and best practices not to mention creating those policies, proce- dures and best practices. This is a time of opportunity and like with every other hurdle, bankers will take an obstacle and turn into an opportuni- ty. Those banks that meet the challenge, adapt and innovate will continue to be efficient and profitable. Together, 24 State Bankers Association and their Boards of Directors recognized this challenge and sought to offer a solution to assist banks in becoming more efficient and effective in their compliance and regulatory areas. You owe it to your bank and your compli- ance officer to see how you can become more efficient and effective in compliance. n