Thought Leadership

Take Advantage of Compliance to Provide Better Service

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August 10, 2018
Take Advantage of Compliance to Provide Better Service
By Bryan Adler

Compliance is a hassle for every financial institution, some more than others, but definitely a matter that must be handled.With a little deeper thinking and creativity, you can turn it into an opportunity to better serve your customers.

Many of you may know the story of Dr. Seuss’ The Cat in the Hat, but do you know the story behind it? Dr. Seuss was asked to write a children’s book that first graders would love, but he had to stick within about 200 or so words a six-year old would know. It took him 18 months, but he eventually got the legendary children’s book down – starting with the first two words on the list that rhymed: cat and hat. It just takes a simple starting point, but that limitation of a 200-word vocabulary drew out his already spectacular, innate creativity. Compliance can be your Cat in the Hat.

Let’s look at some of financial institutions’ top compliance concerns:

 

  1. Cybersecurity continues to grow in importance to financial institutions and regulators due to the increasing and new threats as well as its burgeoning costs. But the more you know about your customers’ behaviors and preferences, it could help you detect certain types of cyberattacks. (Vetter protects the integrity of your financial institutions’ data with SOC2 Type I Certification, Type II pending. Check out our benefits.)
  2. Which brings me to vendor due diligence. Banks must know about their vendors financial performance, cybersecurity efforts and performance. Here again, we can look at how they’re serving your customers. A more comprehensive review might include reviewing your digital banking provider, you can also consider whether they’re providing the most stable and easy-to-use experience for your customers and useful data for valuable insights on the backend for your institution? Are they able to provide the tools that allow your bank to  Activate at the Point of Excitement? Read my recent blog on this.
  3. Bank Secrecy Act compliance and anti-money laundering measures are ideal for getting to know you customers better. Your bank may begin filing currency transaction reports for a business customer that wasn’t really on your radar before, but now they’re transacting in increasing volumes that don’t appear to be illicit. The business is growing and so should your relationship with it.
  4. Closely tied to BSA and AML is the Beneficial Ownership Rule, which is designed to help ferret out business fronts for illegal activities or hiding criminals’ ill-gotten gains. It protects your bank from Office of Foreign Assets Control compliance violations, while you also have greater transparency into who your customers are, and therefore can better pinpoint their interests and serve them what they need when they need it.
  5. Beginning in 2020 for SEC registrants and 2021 for other financial institutions, Current Expected Credit Losses will be the accounting rule of the land for your ALLL. CECL requires lenders to calculate potential losses over the life of a loan and will affect most aspects of your business from capital to expenses, but it is coming so banks can make the most of it. It can provide better insight into which of your clients may perform better with a little hand holding and may appreciate what they see as assistance and you see as better protection of your investment. Vetter’s streamlined loan platform can help your financial institution with CECL compliance and more.

Make compliance your Cat in the Hat! Use the copious amounts of data gathered and develop insights to truly better understand your clients. Identify personas your institution serves to meet their needs when they need to be met, grab their attention, differentiate and Activate at the Point of Excitement!

 

 

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