BETA
This is a BETA experience. You may opt-out by clicking here

More From Forbes

Edit Story

Why Banks Should Stop Fighting And Learn To Love Regulators

Following
This article is more than 8 years old.

Many bankers have likely gasped upon reading the title of this blog.

Let’s face it: the natural reaction is to challenge the regulators. It’s not an easy time for financial institutions of all sizes that are grappling with increased scrutiny, especially the smaller community banks which must adhere to many of the same rules as the largest institutions.

But the reality is, regulations are not going to disappear – and for good reason. After the financial crisis, the need for increased regulatory oversight is clear. As the backbone of the US economy, our nation’s growth depends on community banks figuring out how to operate in this ever-increasing regulatory environment. Because regulators are so deeply sewn into the fabric of our business, it’s time to recalibrate our approach to how we work with them (emphasis on with them vs. around them).

Why? It can mean the difference between struggling to merely meet regulatory requirements and uncovering opportunities

otherwise deemed impossible. But it doesn’t happen by doing nothing. Like any successful relationship, this one requires consistent, transparent communication and consideration of your regulators pertaining to every decision your bank makes.

Start thinking about this audience like you do any other key constituent – customers, employees, investors. When your regulators step into your bank to conduct an exam, they shouldn’t be faced with any surprises. They should understand exactly what you’re trying to achieve and how you’re achieving it.

That means not just letting the regulators come to you. Call them with questions, bounce ideas off them, and ask for feedback. Keep them informed throughout your everyday course of business, and seek out their consultation rather than waiting for it – because no relationship thrives when one party holds back.

While most banks aren’t accustomed to having an open dialogue with their regulators, this relationship is more important to nurture than ever. The banks that recognize the need to not only embrace regulators, but develop a positive relationship with them, are the institutions that will be poised to prosper as industry leaders.