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With the tsunami of new regulations from NCUA and the CFPB, getting good at compliance is becoming a key success factor for credit unions. In this podcast and presentation from the 2013 NAFCU Annual Conference, Toné Gibson explores how your credit union can develop a cost-effective approach to strike a better balance between compliance and operational efficiency. Through the utilization of three methodologies – strategic development, process excellence, and performance management – learn in detail how to reduce the cost of compliance. Wolters Kluwer Financial Services is the NAFCU Services Preferred Partner for Consumer and Member Business Lending & Deposit Services. More educational resources and contact information are available at www.nafcu.org/wolterskluwer.
Citation preview
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Can I be compliant and operationally efficient at the same time?
Tone’ GibsonProgram Manager,
Compliance Consulting Services
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Industry Experience: 25 YearsExperience with Wolters Kluwer Financial Services: 7 Years
Subject Matter Expertise: • Former President/CEO of a Credit Union• Program/Project Management• Regulatory Compliance• Compliance Consulting• Bank Operations
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Pop Quiz #1
What amount of regulatory information do you expect to see published by the regulators within the next 12 months?
Significantly less than today
The same as today
Significantly more than today
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3
45%
39%
14%
2%
Significantly More
Slightly More
Significantly Less
Slightly Less & Same
* Thomson Reuters Cost of Compliance Survey 2012*
Survey Results
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Pop Quiz #2
In an average week, how much of your Compliance Team’s time is spent solely tracking and analyzing regulatory developments?
< 1 hour 1 – 3 hours 4 – 7 hours 7 – 10 hours 10 or >
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Results
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4%
32%
27%
15%
22%
< 1
1 to 3
4 to 7
7 to 10
> 10
*Thomson Reuters Cost of Compliance Survey 2012*
Survey Results
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Pop Quiz #3In an average week, how much time does your Compliance Team spend amending policies and procedures to reflect the latest regulatory updates?
< 1 hour
1 – 3 hours
4 – 7 hours
7 – 10 hours
10 or >
6
7
18%
42%
23%
8%
9%
< 1
1 to 3
4 to 7
7 to 10
>10
* Thomson Reuters Cost of Compliance Survey 2012*
Survey Results
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Pop Quiz #4In an average week, how much time does your Compliance Team spend creating and amending reports for the board?
< 1 hours
1 – 3 hours
4 – 7 hours
7 – 10 hours
10 or >
8
9
27%
35%
21%
8%9%
< 1
1 to 3
4 to 7
7 to 10
>10
* Thomson Reuters Cost of Compliance Survey 2012*
Survey Results
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Consider the average cost to you today?
Regulatory Compliance Officers $55K ‐ $93K
Former Bank Examiners – $71K ‐ $120K
Compliance Consultants ‐ $68K ‐ $115K
Operations Managers ‐ $56K ‐ $95K
Senior Managers – $69K ‐ $116K
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* Simply Hired Salary Builder 2013*
I bet you forgot to include……
Front Line Staff Loan Officers
Member Service Representatives
Tellers
Back Office Staff Data Entry Clerks
Secretaries/Administrative Assistants
Subscriptions, Memberships Fees
Third Party Vendors
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How can we cut the cost of compliance?
By introducing you to three methodologies we believe will assist you with reducing the cost of compliance.
Strategic Development
Process Excellence
Performance Management
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Strategic Development
When it comes to managing compliance….
Where are you going?
How will you know when you get there?
What is going on around you?
It is not the plan that is important, it’s the planning.Dr. Grameme Edwards
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Where do you start?
Establish core team(s)
Perform Risk Ranking
Critical
Important
Relevant
Define strategic goals/objectives
Outline compliance Inputs/Outputs
Identify “time suckers”
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Bridge the gap!
Map your program management processes to your strategic plan
Remove duplications
Apply standardization
Seek opportunities to automate
Risk Assessment
Policies, procedures and controls
Complaint management
Board and staff training
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Process Excellence
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What is needed?
Standard Operating Procedures
Process Maps
Process Owners
Process Controls
Process Variation
Process Metrics
Training/Communication
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Process Maps ‘Visualize’ the Process
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Process Owners
Owns the business process long term
Is named as the individual
Responsibility for the long term health and continuous improvement
Process owners can change over time
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Process Controls
Is a state where processes are predictable and repeatable and capable of producing quality
Inputs control the outputs
New/Enhanced Regulatory Guidance
Customer Complaints/Feedback
Industry Standards/Best Practices
Competitors
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What About Process Variation?
Describes how we view process predictability and repeatability
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Process Metrics
Clear and concise
What are we tracking and why?
Track goal(s), benchmark(s) and progress
Where are we today AND where do we want to be?
Visualize process performance
Take everyone on the journey with you
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Training/Communication
Standardized
Effective
Recurring
Communicates accountability
Tracked/Monitored
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Why is it important?
Performance management allows for the opportunity to ensure that goals are consistently being met in an effective and efficient manner.
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What is Performance Management?
Performance management is the systematic process of monitoring the results of activities and collecting and analyzing performance information to track progress toward planning results.
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Report Cards!!!
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What should you measure?
People
How are they performing?
Processes
How efficient are they?
Procedures
How effective are they?
Technology
Up‐to‐date?
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How can you measure performance?
Metrics/Dashboards
Surveys (internal/external)
Team evaluations
Training and continuous improvement
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Benefits
Improved management control
Motivated Workforce
Visibility to the goals/performance
Direct Financial Gain
Preparedness for upcoming exams
Displays data relationships
Provides well documented and communicated process documentation
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How to tie it all together?
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Plan
Do
Check
Act
Monitor
Correct
Prepare Strategic Plan
Apply Risk Rating
Validate processes
Implementation
Track Progress
Repair
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Thank you!
Wolters Kluwer Financial Services is the NAFCU Services Preferred Partner for
Consumer and Member Business Lending & Deposit Services. Learn more at www.nafcu.org/wolterskluwer.
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Appendix
BackgroundMendo Lake Credit Union is a community development financial institution that serves more than 17,000 members in the California communities of Lake and Mendocino counties. Headquartered in the city of Ukiah, the credit union manages four full‐service branch locations and has an asset value of approximately $122 million.
When Mendo Lake Credit Union began searching for a new vendor to help manage its deposit account disclosures, the credit union sought an outsourcing partner who would be a “one‐stop shop.” The credit union had previously experienced a lot of overlap when using multiple vendors, so finding a single provider that offered the “whole package” was an important part of streamlining its operations and reducing costs. Access to a responsive and knowledgeable customer service team as well as a comprehensive compliance warranty also topped Mendo Lake Credit Union’s vendor wish list.
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Appendix
ResultsAs a result of using Wolters Kluwer Financial Services’ Deposit Disclosure Program, the credit union has cut its printing costs in half, reduced overhead and eliminated scrap waste. Now, the credit union either uses electronic documents or prints onsite only what is needed rather than keeping boxes of preprinted account information brochures on‐hand and then discarding them every time updates are needed.
Wolters Kluwer Financial Services’ Deposit Disclosure Program not only enables Mendo Lake Credit Union to operate more efficiently, but the reduction in resource output also has significantly reduced MLCU’s carbon footprint, waste and costs.
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Appendix
Best of all, LaBrash knows that the credit union’s deposit disclosures and account information brochures are always 100 percent compliant, making her job as a compliance officer much easier.
“It would be impossible for me to stay on top of new compliance requirements and regulation changes without the expertise that Wolters Kluwer Financial Services provides us,” said LaBrash. “They not only keep me up‐to‐date on all compliance matters, but their customer service is outstanding. As an outsourcing partner, I can honestly say that they have exceeded my expectations and have never left me wanting something more.”
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