compliance issues bubbling up in 2015 social media … · 11/14/2014 · bsg financial, llc • 310...

Compliance Issues Bubbling Up In 2015Social Media-Vendor Management-Appraisal ManagementSocial Media Vendor Management Appraisal Management

Jeffrey A. HarperExecutive Vice President

November 14 2014

BSG Financial, LLC • 310 W. Liberty, Suite 701 • Louisville, Kentucky 40202 • (866) 274-8900 Toll Free

November 14, 2014

BSG Financial, LLC • 310 W. Liberty, Suite 701 • Louisville, Kentucky 40202 • (866) 274-8900 Toll Free 2

The Q3 2014 BCI shows that the average financialinstitution will require an additional 1.86 full timeinstitution will require an additional 1.86 full time

employee equivalents (FTEs) to research and address just Q3’s new regulatory changes. This represents a 26%increase in terms of the additional FTEs as compared to

the prior quarter and an additional $45,264 costb d O f th f t d i i th t fburden. One of the factors driving up the cost of

compliance is the continued increase in average hourlyrate for the banking industry The enforcement climaterate for the banking industry. The enforcement climate continues to be “hot” – this quarter there were 150enforcement actions with an average of 7 items per


g paction.

Social Media. Are you ready?Wells Fargo Sets up War Room to Monitor Social Media Sites Bank Technology

News, March 2014


Social Media that Banks are Utilizing


Compliance Challenges• FINRA – Regulatory Notice 10-06

• Reg. B (retaining loan app complaints and comments)

(C f )• Reg. BB (CRA comments in public file)

• Reg. DD (retain commercial messages for two years)

FSA Ad i i i h S i l M di (2010)• FSA – Advertising with Social Media (2010)

• SEC – Social Media Sweeps Letter (2010)

CFPB “ it i l di ” (2012)• CFPB – “monitor social media” (2012)

• FFIEC – Guidelines Adopted ( December 2013)

d


• and many more …

• FFIEC’s- Social Media Guidance-• Social Media Strategy Now Required

– Board of directors and/or senior management spell out how use of social media

• contributes to the strategic goals of the institution

• what kind of controls will be put in place, and

• how ongoing social media risks will be assessed

• Who internally is monitoring your program

• Regular Reporting• Regular Reporting

– Regular reports to the financial institution’s board of directors and/or senior

management, “enabling a periodic evaluation of the effectiveness of the social

media program and whether the program is achieving its stated objectives ”media program and whether the program is achieving its stated objectives.

• Monitoring of Social Media and other Internet Channels Mandated

– All financial institutions will have an oversight process for monitoring information

posted to social media sites administered by the financial institution or a contracted


posted to social media sites administered by the financial institution or a contracted

third party.

Social Media Guidance

Social Media Management Opportunities

• Capture insight into customers’ wants and needs for

i d tnew services or products

• See what customers and non-customers are saying

about your institution.

• Correct negative opinions and impressions

• Evaluate your institutions' competitive landscape

• Third Party Vendor-monitoring


• Third Party Vendor-monitoring..

Social Media Management Challenges

• Moderating information between Compliance and

Marketing.

• Monitoring Web and social media reputation and

competition.

• Archiving posts for regulatory review.g p g y

• Measuring the effectiveness of your daily social media

interactions (ROI) Hard to do!


interactions. (ROI). Hard to do!

Social Media Institutional Participation


Fair Lending Act: Reg. B Equal Credit Opportunity


Social Media “Social Listening”


Finding an Efficiency Tool to Assist with Social Media• Provides a single portal for outbound social media

messages.• Establishes a dual approval protocol for all outboundEstablishes a dual approval protocol for all outbound

messages.• Provides targeted search capabilities.

Archives (forever) all posts on social media sites• Archives (forever) all posts on social media sites and the Internet.

• Rates each post for sentiment (pos / neg / neutral).• Measures brand awareness.• Calculates ROI for social media usage


Firms and Solutions That Can Help with Guidance

• Social IQ• ABA • Hootsuite• Social Assurance

Gremlin• Gremlin• SalesForce • Google AnaylticsGoogle Anayltics


Ve Some people just need aSome people just need aendor

jjSympathetic pat……Sympathetic pat……

Mana On the head…..On the head…..agem

eent With a hammer.With a hammer.


Compliance for Vendor Management

FFIEC guidelines call for banks to perform risk assessments on major vendors that will store or have access to customer and or bank confidentialhave access to customer and or bank confidential information or whose services have a significant impact on the normal operation of the bank. The guidelines are specific as to what steps are required for these risk assessments and what facets of the vendor should be evaluated. FFIECfacets of the vendor should be evaluated. FFIEC also requires that a risk assessment is performed on the contract with vendor. Your bank is also required to annually review the relationship with


required to annually review the relationship with the vendor..

Th Offi f h C ll f h C (OCC)The Office of the Comptroller of the Currency (OCC) expects a bank to practice effective risk management regardless of whether the bank performs the activityregardless of whether the bank performs the activity internally or through a third party. A bank’s use of

third parties does not diminish the responsibility of its p p yboard of directors and senior management to ensure that the activity is performed in a safe and sound manner and in compliance with applicable laws.


Does your financial institution have a successful model?


Automated Tools for Vendor Management Key Elements

• Contract Management

• Document Collection

• Document Repository

• Vendor Monitoring

Ri k A t• Risk Assessment

• Executive Level Analysis

• RFP Assistance• RFP Assistance

• Exam Preparation

COST


$5,000 to $75,000 annually

25

Industry Guidance 2012-213

• Dodd-Frank Act• HVCC• HVCC• TILA• Reg Z (sec 129E)• Reg Z (sec 129E)• CFPB

• Equal Credit Opportunity Act• Equal Credit Opportunity Act


How can you manage regulation?

• Evaluate utilizing an Appraisal• Evaluate utilizing an Appraisal

Management Company “AMC” for

residential appraisals.

–Provide Independence

Compliance Ensured–Compliance Ensured

–Quality Assurance


y

28

Available Resources

A i l L i ti S l ti ISO C tifi dAppraisal Logistics Solutions-ISO CertifiedCollateral Managementwww.appraisalinstitute.comwww.mbaa.orgAmerican Appraisal Management Company


Q&A

Jeffrey HarperJ y [email protected]

November 14 2014


November 14, 2014

compliance issues bubbling up in 2015 social media … · 11/14/2014 · bsg financial, llc • 310...

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