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Implementing An Effective Compliance Management Program

Desired Capabilities

  • Compliance
  • Process Development
  • Program Build-Out

The Situation

In the middle of a strategic growth initiative, a Top 25 U.S. bank received a consent order for failing to implement and maintain an effective compliance management program (CMP). Their current system lacked processes and practices to manage consumer compliance risk – controls to comply with consumer protection-related laws and regulations that would prevent consumer harm.

Due to limited staff resources – particularly those with CMP expertise – they asked Spinnaker to create a specialized engagement team to advise on whether the new activities the compliance team was performing were the right ones and how they could best manage those activities alongside their existing responsibilities.

The Challenge

Serve as compliance advisors by providing guidance on the implementation of issue management, monitoring, policy and procedure review, complaints, and training materials.

Meaningful Outcomes

  • Provided specialized advisory support, guidance and training for a team that was new to CMP.
  • Developed a streamlined process that leveraged the knowledge base of compliance advisors without making testing efforts duplicative.
  • Remediated and closed the consent order requirements within the required timeline.
  • Helped the team achieve a subsequent satisfactory internal audit result.

Our Approach

In an effort to stand up the monitoring component of the CMP, the bank sent its compliance advisors to training sessions to better understand CMPs, learn how to write and execute monitoring plans, and provide training on the new databases established to capture results. The systems lacked automation and were inefficient (in some cases, the tools were not consistently designed), and the monitoring program that was introduced functioned more like a testing program. This caused confusion and frustration among the compliance advisor team due to the scope of the project, lack of resources and its duplicative nature, given that a testing program was already in place.

Recognizing the knowledge and systems gap, Spinnaker began by compiling feedback from the team about the inefficiencies and obstacles involved in the new process. Next, we identified the systemic issues, defined the core process issues, and provided recommendations on how to proceed. One key recommendation was to leverage one “source of truth” instead of the three tools currently in place. We also provided monitoring scripts, OCC guidelines around monitoring programs, and best practices based on prior experience.

With the challenge clearly defined, the engagement team led a session in which we talked through the recommendations and the attributes of an effective monitoring system and led a workshop where we spent time on each of the organization’s scripts and determined how to make it more manageable.

At the end of the session, we took a pulse check of the team. They agreed that they had the clarity they needed and, because they were already embedded in the business, with access to the necessary data (performance metrics, trends, key risk indicators and issue remediation information), they would be able to document and implement the compliance monitoring component of the CMP with existing resources.