How Technology Alters the Reality of Regulatory Compliance

In case you haven't noticed, regulatory compliance is expensive. The banking industry spends an estimated $60-$70 billion a year on compliance, and many banks complain they have been forced to expand their compliance staffs in recent years just to keep up with the increase in regulations. Indeed, compliance-related activities can account for nearly 20 percent of a bank's overhead. The compliance function is also critically important. The three federal prudential bank regulators consider a poor compliance track record to be an indictment of a bank's overall management capability, and they will severely punish any bank that has a significant compliance violation, especially of the Bank Secrecy Act (BSA) and related anti-money laundering (AML) regulations.