promptly and fairly. In a look to the future, the role that conversational AI and other automated platform solutions will play in handling customer complaints will likely start to make its way into regulatory enforcement. Third-Party Risk Management: An increased reliance on third-party vendors for a variety of services creates concern from examiners about risks associated with these relationships. Data security and compliance with consumer protection laws take center stage. It is worth noting that the FDIC pointed out in the consumer compliance supervisory highlights that there has been a 5% increase in consumer complaint volume associated with third-party providers from 2022 to 2023. Many of these complaints are linked to vendors providing credit card servicing, deposit processing and error disputes. Environmental, Social and Governance (ESG) Factors: There is an increasing regulatory interest in how banks integrate ESG factors into their operations. For example, examiners may begin taking a closer look at the environmental and social impacts of bank lending practices. Artificial Intelligence (AI): Banks are gradually using AI and machine learning for various purposes, such as credit scoring and fraud detection. As AI gains popularity, regulatory measures are expected to focus on ensuring that these technologies do not violate consumer protection laws or result in discriminatory outcomes. Cybersecurity: Cybersecurity continues to be a main focus for examiners as digital banking becomes increasingly prevalent. Banks are expected to implement robust security measures to safeguard customer information from cyber threats and data breaches. Examiners remain focused on prevention, detection, response and recovery capabilities in response to cybersecurity threats. Compliance Culture and Governance: Examiners are paying closer attention to overall compliance culture with the expectation that banks will have strong governance frameworks to address compliance risk. They are looking for clear accountability structures from the board of directors down and effective compliance training programs for employees. Anticipated trends highlight changing technology and shifting consumer expectations, reflecting the evolving landscape of bank consumer compliance. Staying at the forefront of these trends is fundamental for banks to maintain compliance and build trust with both customers and examiners. Kelly Shafer, CPA, has over 19 years of experience in public accounting. As a member of the audit and consulting department of the firm, her primary focus has been on serving clients in the financial institution, higher education, governmental and nonprofit sectors. For more information, please contact Kelly Shafer at (304) 343-4126 or kshafer@suttlecpas.com.
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