What’s an appropriate change management strategy for community banks? Each regulatory scenario described above warrants a course of action specific to that issue. For example, regarding the enhanced consumer privacy laws, banks should revisit privacy disclosures, notices, and policies within the states they operate. On a broader scale, it would be prudent for banks to utilize the strategies below to successfully manage the collective number of impending regulatory changes following these three steps: 1. Stay informed of changes through industry groups and trade associations Seek clarification and/or assistance from trusted partners outside of your organization. In addition, involve your operations, technology, and compliance staff to gain a comprehensive view of any potential changes. It is also prudent to communicate with your Board and senior staff and to document your regulatory discussions in Board minutes. 2. Designate an internal stakeholder to implement/monitor regulatory changes In addition to participating in the activities discussed above, this individual can conduct testing after implementation to ensure the process and related controls are operated as intended. It is imperative for this stakeholder to document your bank’s change management efforts for subsequent review by external parties. 3. Partner with an external regulatory expert Given the scope of impending legislation, banks may want to simply outsource their regulatory practice to an external provider. Staying current with newly implemented and/or potential regulations requires time, expertise, and deep industry knowledge. An external overseer can advise on necessary regulation and compliance issues, giving banks the freedom to focus on serving their communities. In addition, hiring an external partner may be a cost-effective solution for smaller banks that do not have the resources to maintain or support a compliance function. ■ lp.bhgandbanks.com/bank-network Scan for more information about compliance and regulatory solutions. “We recently partnered with RMSG. We felt it was important to have both a backup for our one-man compliance department as well as an additional level of expertise.” Phil Bryan, Chief Banking Officer, Reading Cooperative Bank, MA Testimonial based on unique customer experience. Individual customer experiences may vary. “Financial institutions should understand how these changes could affect their operating model and strategy.” 2023 Issue 1 | 27
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