Accountability: The Key to Compliance Success By WILLIAM J. SHOWALTER, CRCM, CRP Senior Consultant, Young & Associates Inc. Compliance is recognized by the financial industry as a high-risk function. Failure to manage it effectively can result in high costs to an institution, as witnessed by many supervisory enforcement actions and fair lending settlements over the years. Compliance management is an important element of an institution’s overall risk management efforts. It makes sense to ensure that it is “owned” by line managers, those whose operations will generate either compliance or noncompliance, just as with all other elements of the institution’s overall risk. To make compliance management work well — effectively and efficiently — line personnel need to be given the tools to succeed at compliance and then held responsible for their results. When senior management establishes accountability and all staff believe it, and compliance performance is measured meaningfully, positive compliance results can occur. As with other aspects of compliance management, identifying and categorizing levels and types of compliance risks are critical to both efficient operations and effective outcomes in any system of enforcing accountability. Noncompliance as Risk In recent years, federal agencies have made a fundamental shift in how they examine financial institutions for compliance within their overall examination process, adopting a risk-based methodology. The agencies’ programs are designed to focus 12 In Touch
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