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