Will We Ever Learn?

Let’s face it… the last week has not been pretty for the banking industry with the implosions of both Silicon Valley Bank and Signature Bank, while still, other regional banks teetered but appear to have been pulled back from the precipice. Pure and simple, this was total mismanagement of risk between the assets on their liability side as well as a textbook case of how a bank should not be run. As a former colleague of mine used to say: “Nobody gets to bet the Bank.” Truer words…

Let’s not sugarcoat this. Unlike the financial crisis of 2008’, this crisis surely could have been averted. Each institution today must have the ability to manage risk in all its forms, meaning both their financial and non-financial risks and for many, gauging and assessing the non-financial risk side can be just as problematic and challenging for many as the financial risks.

One of the major non-financial risks that SCA encounters oftentimes during its engagements is what we call Conduct Risk, which occurs due to inaccurate management choices or decisions by the banks’ employees and their team members. Add inadequate internal processes, people, and systems and well, I don’t need to spell it out for you.  

Aside from having a well-constructed governance and risk management infrastructure, each and every institution today must have a compliance management system which is absolutely foundational to building resilience, maintaining business continuity and ensuring you weather the next inevitable storm.

At SCA, we believe risk can be an incentive for growth and that implementing a strong compliance management system strategy empowers our clients to transform volatility into order, helping you to master the complex web of regulations and regulatory changes today.

SCA’s team of expert compliance professionals and consultants can support your institution in aligning policies with procedures, processes, monitoring and testing programs, and help you develop a compliance audit function that pertains to all applicable laws and regulations. SCA works to implement controls where needed and eliminates inefficiencies and redundancies. Let us streamline compliance processes with workflows, self-assessments, and/or work in conjunction with your compliance team to eliminate anxiety, stress, and uncertainty in preparing you for an upcoming regulatory examination. Ask yourself the question, “Are we ready for our next upcoming regulatory exam?”

Taking steps now to prepare can help keep you ahead of regulatory exams. Instituting the best preparations and practical solutions for a regulatory exam begin by establishing a sound culture of compliance but will also help your bank to drive enterprise risk management.

To learn how SCA can help you prepare and achieve a successful exam, or to design and develop a compliance management response system that works within your institutions’ goals, structure, and risk tolerance, contact Bill Dolan, CMB, Director at (617) 694-2617 or email Bill at Wdolan@scapartnering.com. For these and other services offered by SCA, please visit our webpage at: www.scapartnering.com.