Harness Technology to Automate Your Compliance Efforts

green safety harness
Connie Shoemaker Photo
VP/Operations for AutoPilot® Services

4 minutes

Put automation to work in these three areas and you’ll feel more at ease.

Sponsored by SWBC

Technology affords credit unions many benefits. It allows lenders to increase transaction speeds and analyze their risk management programs in ways that make life more convenient for both members and staff. Over the last few years, financial institutions and their partners have adopted technology across all facets of the business. From helping to increase the speed of payment settlement, organizing collections efforts, or accessing their team’s daily tasks through cloud-based software, embracing technology has re-shaped how many CUs operate and serve their members. 

So why aren’t more credit unions using technology—and specifically automation—to better manage their compliance efforts? And, should this be a priority for a credit union’s compliance team? 

After loan growth, managing the regulatory burden is the biggest challenge credit unions face, according to a 2016 FINTalk Report. Here are a few ways that automation can help you better manage your compliance efforts and put you more at ease.

1. Monitor for Unusual Transaction Activity

Thanks to the USA Patriot Act, the Bank Secrecy Act, and the subsequent Anti-Money Laundering regulations, financial institutions need to monitor payments transactions to detect and report suspicious activity. This is an effort to reduce money laundering and terrorist financing. But, with potentially hundreds of thousands of transactions occurring every day, the need to streamline the monitoring process is critical. So, what are some ways technology can help an institution increase efficiency and stay compliant?
Consider adding business rules to your systems. Many systems allow for these rules to be created and are used by businesses to monitor established service-level agreements with vendors or even to monitor the internal performance of a program. Adding business rules could help your compliance team identify questionable transactions. When those rules are violated, a red flag is raised and sent to your compliance team for a more in-depth review. The automation of business rules removes the manual process of combing through thousands of transactions.

2. Detect Collections Trigger Words

In collections departments across the country, many teams deploy the latest in phone technology to monitor calls made to borrowers. Monitoring calls goes beyond collector performance; it’s also to ensure adherence to the Telephone Consumer Protection Act, the Fair Debt Collection Practices Act, and Dodd-Frank. Credit unions and vendors providing outsourced collections services also need to track and avoid using unfair, deceptive, or abusive acts or practices trigger words. This has been of particular concern in the collections business because consumers essentially determine if they’ve been treated unfairly; they can make public, one-sided complaints via Consumer Financial Protection Bureau online forums. This scenario is challenging because there is a great deal of subjectivity about what is unfair, deceptie, and abusive; however, thanks to technology, tools exist for the specific purpose of flagging collections calls where trigger words are used during the conversation.  

3. Easily Distribute New Compliance Bulletins 

When a new regulation is deployed or there’s an update, distributing the information is critical to all parties—vendor and client. Often, a memo or email is deployed across teams. Perhaps a memo or email is deployed across teams, but the information doesn’t flow all the way to front-line employees. What if, through the help of technology, there was a more efficient way to update the necessary parties? 

Your teams are probably using software or web-based systems to complete daily tasks. Your compliance team could place bulletins and information about new laws on those same tools. This would distribute the information easily to your internal teams or vendor partners, much like a company’s intranet does.

Compliance continues to evolve. Financial institutions should embrace technology to make their compliance lives easier. Better yet, partner with a financial services company that understands compliance, embraces technology, and applies both to all aspects of solutions. Automation is great; however, a human element remains a common thread through each of these tools. 

Connie Shoemaker is VP/operations for the financial institution group’s AutoPilot® services at CUES Supplier member SWBC, San Antonio, Texas. Learn more about finding the best tools for your risk management strategy in our ebook, The Right Tools for Risk Management.

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