Survey Reveals ‘Substantial’ Risk, Compliance Concerns for U.S. Banks

Banks continue to feel a heightened sense of compliance and risk concern, according to the results of a survey released today by Wolters Kluwer Compliance Solutions. The survey, conducted for the past nine years, resulted in a main indicator score of 128, a 25-point increase compared to 2020 and the third consecutive year of an increase.

According to Wolters Kluwer, the increase is fueled by continuing concerns about navigating regulatory changes, managing risk and an increase in the cost of regulatory fines. The score is calculated based on several factors, including the number of new federal regulations and enforcement actions, the dollar amount of fines imposed on banks and credit unions in the past 12 months and survey respondents’ input. The threat of ransomware attacks led the list of enterprise risk planning factors. The pandemic’s ongoing effects also continued to be a concern, followed by loan default risk and inflation worries. Other areas of concern include business resilience and adaptability, recession and climate-related risks.

Investing in digital transformation was a new question this year, with 63% anticipating “significant” or “some” gains in their digital lending processes. Forty-seven percent reported making some progress with digitizing lending capabilities, while 24% said they have made significant progress or are fully digitized. As part of the survey, banks also reported on their most pressing regulatory compliance challenges in the coming year.