Banks define success in regulatory compliance by examination ratings more often than by violations or internal audits, according to a Bank Administration Institute survey.
About 85% of the 227 banks surveyed measure compliance success by examination ratings, however, most banks do not compensate employees for good ratings. Only 20% the banks surveyed by BAI tie compliance to compensation in any way. Among those banks, 58% have more than $5 billion of assets.
The survey results will be presented today at BAI's Bank Regulatory Compliance Conference here.
The survey found 73% of the banks have corporate-level regulatory compliance groups. At 19% of the banks surveyed, compliance groups report directly to the bank's chief executive officer; 17.5% of the banks have the groups report to the general counsel, 13.3% to the general auditor, and 12.7% to the chief compliance officer.
Corporate structure dictated how compliance management was organized for 44.5% of the banks surveyed while line of business was the main factor for nearly 36%.
Compliance officers are most often deployed to oversee consumer lending, mortgage lending, community reinvestment, and deposit taking.
To help with the heavy demands of consumer-related compliance, banks enlisted the help of computer technology. More than 54% of the banks surveyed said they use technology for training. Loan and deposit software is the most popular automated compliance system, according to the survey.
Of the surveyed banks, about 30% had less than $250 million of assets, another 32% had more than $250 million but less than $5 billion, and 17% had more than $5 billion. Twenty percent did not indicate their asset sizes. Nearly 58% of the surveys were completed by corporate compliance officers.
