Financial organizations are required to establish, maintain, and enforce policies and procedures designed to comply with applicable laws and regulations. At a minimum, firms should address the following segments:
- Risk identification and assessment
- Processes and controls to manage risk
- Key risk metrics
- Risk reporting
- Escalation protocols
The COVID-19 pandemic forced many organizations to take stock of compliance policies and procedures to address the business impacts of the pandemic. For example, COVID-19 has forced a shift to digital services. Similarly, the transition to remote working has shown other ways to operate successfully. These impacts require organizations to ensure that their controls adhered to new and evolving business processes, regulations and best practices.
Is your financial organization prepared?
You're not alone. The COVID-19 pandemic blindsided many organizations in many industries, including financial institutions.
Unforeseen disasters are always lurking. Take the time to refine internal compliance policy and procedures and set your organization up for success. Here are the primary bank compliance policy and procedures updates that your organization should consider to set yourself up for success.
3 Bank Compliance Policy and Procedures Updates Post-COVID-19
The three bank compliance policy and procedures updates you should focus on are:
- Productivity Improvement & Technology Enablement
- Customer Experience
- And, Risk Management & Disaster Recovery Response
Let’s take a deep dive into the details of each below.
1. Productivity Improvement & Technology Enablement
COVID-19 will require organizations to look for opportunities to accelerate digital transformation processes and cloud enablement roadmaps rapidly. Safeguarding customer information should continue to be a priority.
In this scenario, organizations should look at activating digital safeguards and protocols that comply with all applicable laws and regulations.
Some of the laws and regulations you need to be aware of are:
- Customer “Opt-Out” of Disclosures to 3rd-Parties
- Prohibition on Disclosure of Account Information
- Information Security Program
- Privacy Program
- Identity Theft Red Flags
- The Fair Credit Reporting Act
- The Electronic Fund Transfer Act
- The Right to Financial Privacy Act
- The Telephone Consumer Protection Act
It's crucial you do your homework and brush up on the above laws and regulations. You can find out more by visiting the American Bankers Association website.
2. Customer Experience
COVID-19 has changed consumer preferences. Additionally, customer expectations have rapidly changed as finance firms move towards a digital-first philosophy. As such, finance organizations should look to update policies around customer experience and engagement.
No matter what changes your financial institution makes to enhance the customer experience, one thing is guaranteed: changes are necessary for this post-COVID-19 environment.
3. Risk Management & Disaster Recovery Response
COVID-19 has required financial organizations to improve their ability to respond to sudden shocks. This response covers two primary verticals, including:
- Business Continuity: The plan of action to ensure that regular business will continue even during a disaster.
- Disaster Recovery: A subset of business continuity and the process of restoring vital systems.
Federal and state laws require financial organizations to construct a formal disaster recovery and business continuity plan. This process starts with identifying core business functions and ensuring that safeguards and response protocols are in place when an unforeseen disaster strikes.
Your comprehensive and robust business continuity and disaster recovery plan should include:
- A detailed assessment of all potential risks and threats your organization could face in the wake of a disaster (e.g., fires, hurricanes, earthquakes, cyberattacks, pandemics, etc.)
- What impact each of those risks could have on your key business processes and functions (e.g., supply chains, revenue streams, customer experience, etc.)
- What resources you’ll need to mitigate those risks, such as infrastructures to enable remote work or the ability to automate payments
- The plan of action your company will take in the event of a disaster and who will be responsible for executing the plan
The process involved with creating and implementing a robust business continuity and disaster recovery plan is time-consuming but critical for the continued success of your business through a disaster.
We highly recommend you seek the services of an outsourced risk management and regulatory compliance provider — like us. With the right 3rd-party provider, you can confidently focus on your core business, knowing that they are handling your firm's ability to remain resilient in times of business disruption.
Take our free self-assessment to find out how well your financial institution manages risk and regulatory compliance, and contact us when you’re ready to get help from an outsourced provider.