Survey shows concerns over compliance trending down

by CDW Financial Services|Dec 12, 2016

While no bank or mortgage lender has a crystal ball to see what lies ahead in 2017, it is fair to say many lenders are feeling better about compliance for the year ahead. This week’s FIN News shares insights from The Mortgage Orb article “Survey Shows Mortgage Lenders Feeling More Confident Heading into 2017” and shares details about mortgage lenders’ shrinking concerns for the coming year. Here are the key takeaways:

New finds from a survey by Wolters Kluwer discovered some positive news from mortgage lenders.

According to the firm’s annual Regulatory and Risk Management Indicator survey, lenders have fewer concerns about regulatory compliance compared with one year ago, and technology is a big part of the reason why. The results of the survey recently conducted with U.S. banks and credit unions shows that concerns over regulatory compliance and risk management have declined somewhat for the first time in four years.

Findings that went down:

  • About 66% of respondents say mentioned concerned over their organizations’ ability to maintain compliance with changing regulations, which was down from 73% in 2015.
  • About 64% say they are concerned about demonstrating compliance to regulators, also down from 71% in 2015.
  • About 63% say they are concerned about keeping track of changing regulations – down from 72%.

Other findings:

  • There was about a 5% increase in organizations that report having “an integrated or strategic risk management program” compared with last year.
  • In addition, a majority of respondents, 78% in total, cite confidence in the ability of their organizations “to manage a regulatory change, such as TRID, HMDA or URLA.”
  • Overall concern levels regarding new HMDA data collection requirements have dropped from 73% two years ago to 59% today, likely due to the fact that the content of the revised HMDA regulation has been released by the CFPB since that time.

Key takeaway:

  • Although 72% of respondents confirmed that their chief compliance officers have the ear of executive leadership, reporting directly to either the president/CEO or board of directors, 33% cited inadequate staffing, another 26% cited manual processes and 21% cited competing priorities as major obstacles to effectively implementing their compliance programs.

While this news is promising about compliance and risk, other challenges including cybersecurity, regulatory change management, fair lending and third-party risk are still big concerns for mortgage lenders.

Want to read more about trends impacting banks and credit unions? Our winter issue of the FINTALK Report shares the latest IT insights for the financial services industry.