Compliance and service are both key for small banks, credit unions
Individuals may be flocking to credit unions and small banks that offer them personalized services, but these institutions could be feeling pressure despite the increase in members. The Regulatory & Risk Management Indicator from Wolters Kluwer Financial Services revealed community banks and credit unions are concerned when it comes to regulatory compliance.
More financial institutions feel pressure
April's index score jumped to 136, as compared to a baseline score of 100 in January 2013. Two of the most significant factors in the heightened score were attributed to regulatory requirements and compliance mandates. Sixty percent of banks are preparing for new regulations by taking initiatives like hiring compliance experts.
In regard to regulatory requirements, smaller banks and credit unions appear to be most worried about the Consumer Financial Protection Bureau's RESPA/TILA disclosure, and 59 percent cited it as a top concern. Another 53 percent claimed new mortgage servicing rules were a priority, and 51 percent said the same of Qualified Mortgage requirements. Among larger financial institutions, 55 percent cited the Unfair Deceptive and Abusive Acts and Practices standards as a requirement they were worried about.
Don't neglect customers in an effort to comply
While it's essential for financial institutions to ensure their practices are in compliance with any new requirements, they cannot let customer service slip in the process. Individuals may become dissatisfied with their bank or credit union because they feel as though the organization is putting too much of a focus on regulations and paying too little attention to consumers, and financial institutions may suffer severe repercussions as a result. Account holders may choose to head elsewhere when they feel underappreciated, especially if their financial institution was previously known for its outstanding service.
By ensuring there are enough staff members on duty to handle requests and any issues, small financial institutions can make account holders still feel appreciated, even as they turn their attention to compliance issues. Providing patrons with a self-service coin counting machine can also guarantee everyone is assisted quickly and that no one stands in line for an extended period with a heavy jar of coins and leave with an unfavorable impression of a bank. Encouraging business account holders to invest in technology like remote deposit capture using the fastest check and currency scanners ensures these individuals know their financial institution wants them to employ the latest technology and is looking out for their best interests.