What to consider
Greener pastures. Following the financial crisis, many financial institutions strengthened their compliance programs in a rush to meet regulator mandates and avoid fines and sanctions. As regulatory pressure eases, consider how you might make your compliance investments more efficient, particularly given new advances in RegTech, automation, and machine learning. These innovations reach into areas from loan origination to monitoring against fraud, insider trading, and money laundering.
A few exceptions: IFRS 17, CECL, and cybersecurity. While many firms may be breathing easier, regulators are paying more attention in a few areas. Insurers should fully understand the changes and put an IFRS 17 plan together quickly. The SEC has made it clear that robo-advisers are subject to the same regulatory framework as traditional advisers. You’ll want to review investment models, disclosures, and compliance programs. The Financial Accounting Standards Board’s (FASB’s) new credit losses standard, the current expected credit loss (CECL) model, may present implementation challenges. You’ll need to think through changes that may be necessary to your processes, systems, and controls in order to implement the CECL model, as well as governance and controls. Cybersecurity is also under the microscope in every industry, with the stakes much higher in financial services. Make sure you have a detailed, tested plan to defend against—and respond to—cyberthreats.