Ncontracts’ The Future of Compliance describes compliance’s transition from more of a mundane obligation into a strategic priority. However, that change, still ongoing, has been far from smooth.
Compliance has become a strategic function, with 82% of respondents saying they are satisfied with board and management support. Far fewer, 56%, report stronger compliance integration into training and policies. This suggests a gap between executives’ stated and displayed support.
More expectations are foisted on compliance teams, but without accompanying resources. Roughly 38% of teams have at most two members, including 25% in the $1-$10 billion range. Two-thirds expect a level or lower budget.
“Consider what that means in practice: a $5 billion institution might have a three-person compliance team overseeing third-party risk, fair lending, BSA/ AML, cybersecurity oversight, and more,” the report states. “That same team size would have been stretched for a $500 million bank just a few years ago.
“But a ‘flat’ budget in compliance terms is rarely neutral. Costs are climbing across nearly every dimension — from technology and staffing to examiner expectations — meaning many institutions are effectively facing a real-dollar reduction in resources. The result is a widening gap between regulatory demand and institutional capacity.”
The typical professional is experienced but aging. One in four can retire within five years. This makes succession planning crucial. With experienced staff becoming increasingly rare, this is driving up their prices, with some companies struggling to meet them.
The number of risks is growing:
- Regulatory uncertainty (38%);
- Fair lending (33%);
- Limited resources (30%);
- Staff training (30%);
- BSA/AML (25%); and
- Cybersecurity (16%).
Technology helps compliance professionals meet these challenges. Those reliant on spreadsheets and email report seven times more examiner questions and concerns, and four times lower satisfaction with staffing and strategic involvement than those embracing automation.
AI and data-driven actions are described as emerging trends, with 32% of institutions reporting no AI use and 26% exploring or piloting solutions. A paltry 2% have broadly implemented it. Many predictable barriers remain.
