RMA Survey Addresses Impact of Regulatory Burden and Pace of Regulatory Change

Philadelphia, PA (March 28, 2018) —

The Risk Management Association recently conducted its second bank regulatory survey (the first survey was conducted in 2016) which identified industry trends and practices with respect to risk management and regulation over a period of time. The purpose of the survey, which generated responses from 34 institutions, including 14 mid-size and 20 large banks, was to deliver insight and add value to discussions with senior Washington regulatory officials during RMA’s 2018 meetings. The survey focused on seven categories, including enterprise risk management; compliance; examinations; accounting issues; lending and service products; directors’ duties and responsibilities; and the regulatory environment.

Among other findings, it was learned that:

  • Operational risk (50%), including cyber risk and third-party risk, posed the greatest risk management challenge, followed by regulatory compliance risk (30%) and credit risk (20%).
  • Approximately 50% of the banks reported that they had dedicated between 6% and 10% of their revenue to regulatory compliance in 2017, while 20% responded that they had spent less than 5%. Banks reported CECL (50%) as being the most concerning regulatory change with respect to implementation and the ability to manage.
  • With regard to regulatory examinations, banks reported BSA/AML as receiving the greatest level of attention during their latest examination/visitation, with IT and cybersecurity following right behind.
  • On balance, 84% of the banks planned to increase the commercial and industrial lending segment, while 64% planned to increase the consumer lending segment.
  • Banks agree that the ability to keep up with the regulatory environment is the top concern for directors, with 48% of banks saying they understand the responsibilities imposed by the regulatory agencies.

The next bank regulatory survey will be conducted in the fall of this year.

About RMA
Founded in 1914, The Risk Management Association is a not-for-profit, member-driven professional association whose sole purpose is to advance the use of sound risk management principles in the financial services industry. RMA promotes an enterprise approach to risk management that focuses on credit risk, market risk and operational risk. Headquartered in Philadelphia, Pennsylvania, RMA has 2,500 institutional members that include banks of all sizes as well as nonbank financial institutions. They are represented in the Association by 18,000 individuals located throughout North America, Europe, Australia and Asia/Pacific.

Media Contacts
Stephen Krasowski, skrasowski@rmahq.org, 215-446-4095
Frank Devlin, fdevlin@rmahq.org, 215-446-4137