Title: Day of the Geek: After Decades in Banking's Basement, Compliance Has Arrived. the Once-Wide "Compliance Gap" between Management and Practitioners Has Narrowed. What's Driven This Cultural Shift for Banking? and How Far Will It Go?
Abstract: Oh, East is East, and West is West, and never the twain shall meet ... Rudyard Kipling penned those lines while living in India in 1889, but the poet could have been writing about the history of bank compliance. For decades, Compliance lived in banking's basement, often literally. was a byproduct of consumer banking, the realm of alphabet-soup regulations, and suffered from some of the same second-class-citizen status that consumer once suffered. commercial lenders and marketing types who typically rose to the top of banks in those days weren't even reading from the same book, let alone from the same page, as compliance officers. In a business where growth and profitability targets reigned, compliance was seen as a cost center that begrudged. So, for many years, two separate cultures existed: the banking culture and the banking compliance culture. At industry meetings, real bankers talked about fresh new ideas for bringing in business, reaching up, out, and beyond as conditions grew more competitive. To them, regulators were impediments--people devoted to creating roadblocks and wallet drains. Regulator jokes often ended with the line, from Washington and I'm here to help you. At their meetings, compliance officers held semi-religious conversations about Regs A, C, D, Z, et al. At compliance meetings, regulators were colleagues--high priests with whom one could reason out ways to keep the bank in the faith. (Even the jokes were different, and frequently were about management's compliance gaffes, i.e., : FDICIA? She works in Accounting, doesn't she?) was not surprising that, out of all bank employees, compliance folks latched onto the internet first, flocking to the old Money Page, and later to bankersonline.com and ABA's Compliance Center site. Suddenly there were ways to share the daily frustrations of basement life--and solutions--with other basement dwellers. Seismic shift But while all that was happening, the industry's tectonic plates were moving. distance between and bank compliance, once a gap rivaling the Grand Canyon, began shrinking. We reached this conclusion after discussions with senior regulators and managers, compliance heads at banks of all sizes, trade association staff, and headhunters. The gap was bigger than it is agrees Raymond P. Davis, president and CEO at $5.3 billion-assets Umpqua Holding Corp., Portland, Ore., who came into the business from the accounting world. It has narrowed. Davis says that in his own bank's case, a philosophical decision has been made about compliance and regulatory burden. don't whine about it and I don't moan about it, says Davis. the hand I've been dealt. Our attitude around here is all about staying in compliance. We're a growth-oriented company and we never want a compliance issue to be the thing that stops the train. The possibility of potential reputational damage from compliance missteps is much greater today, and you can't afford to take the risk, says Charles Bowman, an attorney who became Bank of America's Principal Compliance Executive in 1999. The bar has been raised and regulators are less tolerant, and, in fact, responsible managers are less tolerant. And we don't want to be embarrassed. Soon after promotion to the compliance leadership spot, Bowman wanted a way to punch through to all employees the message that compliance isn't just for compliance officers anymore. Thus was born a tagline that he and all his many staffers use on e-mails: Compliance: It's Everybody's Business At Bank of America. Sometimes Bowman caught flak about that line, he says, with other executives telling him he was diffusing responsibility for his own area's duties through the rest of the bank. Not so, Bowman shot back. With 200,000-plus associates around the world, how can a behemoth like Bank of America hope to keep its nose clean unless everyone accepts their piece of the compliance challenge? …
Publication Year: 2006
Publication Date: 2006-06-01
Language: en
Type: article
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