The Case for Streamlined Treasury Management Services

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Treasury management services play a crucial role in day-to-day operations and long-term planning for financial institutions.

An effective treasury management solution can help banks drive deposits and attract a broader customer base through services like cash management and payment processing solutions for their business customers. It helps banks manage their liquidity risk and improve their liquidity profile while generating income. But while hand-in-glove support has always been part of a successful financial institution’s offerings, today’s tech-savvy business customers expect more than superior client support. They expect convenience in transacting their business.

Commercial customers increasingly expect to be able to sign up for treasury services in a quick and easy interaction — even better if it’s done online. So, what can a financial institution do to support that? They can start by revisiting their treasury management disclosure document solution.

Managing treasury management services agreements manually is cumbersome, tedious and, ultimately, an ineffective use of time for bank staff. In order to draft compliant content, financial institutions either need to engage outside counsel or hire someone to manage their treasury content in-house. If leveraging outside counsel, banks are then tasked with the burden of maintenance, tracking any regulatory changes and reengaging counsel to make changes when necessary. Meanwhile, hiring in-house counsel is expensive and tasks the financial institution to create their content and ensure it is current. Both options are costly, and both expose financial institutions to a considerable amount of risk.

Instead, financial institutions should consider engaging with technology providers — much like they already do for in-branch and online deposit origination services. The ideal solution should allow financial institutions to build their own customized treasury management services documentation with compliance guardrails that ensure the solution fits and remains compliant. This allows banks to share and promote custom, bank-defined content that describes the treasury services it offers to commercial customers in a single master services agreement that can be shared in branch or online. Leveraging multiple delivery options for this content is a huge boost to financial institutions that want provide options for commercial customers.

Financial institutions should seek out technology that allows them to easily configure their treasury services agreements and is capable of maintaining those agreements over time — without having to start from scratch or engage counsel. Without a standard, well-defined process for updating treasury management disclosures, financial institutions run the risk of releasing inconsistent or inaccurate content to commercial customers. They should look for solutions that have well-thought-out change management processes. Solutions that offer an easy workflow, allow for customization while maintaining compliance and integrate into their existing technology stack is icing on the cake.

Investing in technology that streamlines treasury management documentation not only helps banks reduce their maintenance costs associated with compliance, it allows them to leverage a self-service model. When they add or modify services, they can handle the updates internally, rather than reengaging counsel or putting the content through a rigorous compliance review.

Opting for a technology solution also allows financial institutions to be more agile with how content is presented. Instead of maintaining agreements for each treasury services they support, they can streamline their agreements into a single master services agreement, which reduces administrative tasks and reduces tasks like in-person signing that are often involved in commercial customer onboarding.

If banks are looking to strengthen their treasury management services, a great place to start is exploring technology partnerships to help create and maintain their content. It frees up skilled staff to focus on the things that build business relationships, rather than words on a page.

This article has been prepared for general information purposes only and is not legal advice. The information in this article is not intended to create, and receipt of it does not constitute, an attorney-client relationship.

Compliance Success Following the Small Business Lending Rule

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The Consumer Financial Protection Bureau finalized its 1071 rule at the end of March 2023. Financial institutions can soon expect an unprecedented level of scrutiny around data collection and reporting.

The 1071 ruling is a top regulatory compliance concern expressed by executives, surpassing even Bank Secrecy Act and anti-money laundering rules and obligations associated with the new credit loss standard. It serves two main purposes: it more strictly enforces fair lending laws by providing tracking of small business credits, and it enables creditors to more accurately identify and support women and minority-owned business needs within their communities.

This additional level of regulatory oversight presents unique challenges for banks that will need to implement system and staffing changes in the 18 months following the announcement.

The next steps are deceptively simple but banks must adhered to them in order to create successful systems, procedures and facilitate scalability after the rule goes into effect.

Familiarize and Analyze
First, bankers must determine whether their institution is covered under the 1071 data collection rule. If your bank has originated at least 25 credit transactions to small businesses in the 2 preceding calendar years, you will likely be beholden to these new regulations. If you are unsure whether you qualify, it’s recommended to err on the side of caution.

After your bank determines that it’s subject to the new regulations, it is imperative to become aware of the things you can and cannot ask borrowers in accordance with 1071. Analyzing efforts must include reviewing all small business loan portfolios — things like credit lines, credit cards, merchant cash advances and loans — and creating detailed reports for businesses that will be impacted by the new ruling.

Determine Procedures and Data Collection Standards
A main indicator of success is data integrity. To ensure data integrity, a bank’s policy must include detailed procedures with marked responsibilities and a comprehensive understanding of the institution’s compliance goals by all staff members.

In order to collect strong data, banks may need to implement a robust collection system. Not only must they include loan numbers, types, purposes and pricing in a borrower’s portfolio, they need to include data specifically related to credit, as well as applicable demographic data points. This means training staff in these new procedures, which takes significant amounts of time and money. Institutions predict they may have to double their staff — which on its own does not guarantee the quality of data will be consistent.

One option leaders have are leveraging efficient machine learning systems to stay ahead of the curve and produce quality data while reducing staffing costs.

Automate to Improve Outcomes
Though the 1071 ruling will include starter tools like sample tracking sheets, data integrity will become even more difficult for banks to maintain over time. Manual processes that require human review are prone to error; decreased data integrity will impact any bank’s ability to successfully navigate regulatory reviews and audits.

Deana Stafford is a senior vice president and director of CRA and Fair and Responsible Lending at First National Bank Texas, the community bank unit of Killeen, Texas-based First Community Bancshares. Stafford’s colleagues already use automation to help scrub date related to the Home Mortgage Disclosure Act. Now, with the 1071 regulations, automation is on Stafford’s mind.

“We have already added one full-time staff, citing 1071 and the expansion of CRA data collection and reporting after reading the rules, but there is no way we can double our staff,” says Stafford. “Automation is the best long-term solution.”

Third-party tools that specialize in compliance systems and mitigating risk are the solution. Automation can easily find, consolidate and track the over 30 reported data points under the new rule, and is key to banks efficiently using both staff and resources. Verifying income and extracting data from verified documents can be done by a machine learning system that is embedded into existing digital onboarding infrastructure at a pace much faster and more accurate than a bank employee. Machine learning can shrink labor costs, increase lending capacity and guarantee data integrity; automating monotonous and time-consuming processes is the next logical step toward optimization in the financial industry.

The final 1071 rule is top of mind for financial industry professionals. Leaders must take a close look at their systems and make plans that allow them to stay competitive and compliant. Institutions must invest in intelligence systems to achieve fair lending compliance standards. Addressing current and future compliance issues with automation is the most effective way to avoid skyrocketing time and labor costs.

Turning Cost Centers Into Strategic Innovators

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Compliance, risk and audit are important components to safe and sound banking, but too often they’re thought of as cost centers that don’t play a major role in customer engagement. However, those so-called cost centers can help drive new business. Engaging those functions from the start can lead to better partnerships with fintech vendors and ultimately to a better experience for the customer, says Michelle Prohaska, chief risk and compliance officer at Nymbus.

In this video, she discusses:

  • Vendor Selection
  • Best Practices for Communication with Vendors
  • Third-Party Risk Considerations

Reduce Lending Risk in the Omnichannel Environment

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Credit risk and risk associated with digital origination and authentication have become top of mind for bank boards and executives. Banks that are able to optimize lending practices to give consumers faster and more efficient experiences and interactions throughout their digital lending journey are seeing greater pickup and success.

Today, many borrowers prefer application processes that accommodate both digital and staff-assisted capabilities when seeking a loan. To process loans in an omnichannel delivery ecosystem, banks are turning to lending options that have the ability to prospect, originate, underwrite, process and close secured and unsecured credit cards, lines of credit and installment loans.

Manually assessing an applicant, their collateral and whether the loan meets the bank’s compliance requirements and lending policies increases the risk of inconsistencies, oversights and unintended consequences. Automation provides institutions with consistent inputs, analysis, compliant processes and calculations, predetermined classifications, accurate risk-based pricing, consistent warnings for policy exceptions and predictable decisions and outcomes with greater speed and efficiency. It also improves the interpretation and analysis of the applicant, credit, debt obligations, collateral and the execution of the institution’s inclusion/exclusion policies, such as summing up debt totals and calculating ratios used in the underwriting process. It can calculate the proposed loan payment, annual percentage rate (APR), and ratios at the applicant, household, business, guarantor and loan levels. It can also calculate custom credit scores.

While banks receive many benefits from using digital channels to serve borrowers, they also face vulnerabilities and risks such as fraudulent applications and data privacy concerns. In addition, digital lending might require a bank to collaborate with numerous third-party fintechs, exposing both borrowers and the institution to new and heightened levels of risk.

Banks need more cost-effective processes and decision models to address qualification ratios associated with online lending. These models should employ analytics and automation that can decline, decision, and refer applications appropriately to maintain an institution’s profitability, mitigate risk and not overwhelm lenders.

Mitigating Credit Risk and Increasing Productivity
Technology simplifies the loan origination process for banks and customers by guiding customers through each step in the process. Technology and automation can eliminate errors and the need to rekey data, which streamlines operations and enables staff to focus on additional revenue-generating opportunities.

Institutions that would prefer to slowly test automated decisioning can start with automated decisioning for denials for applications that fall outside of loan policy. An instant denial allows loan teams to focus on profitable and better-qualified candidates. Decisioning analytics evaluate areas such as credit quality, borrower stability and collateral risk. A decision and rules engine applies industry standards, institution-specific rules and policies and custom attributes, such as credit report analysis, for automated decision support during the loan origination process.

Automated solutions can provide speedy decisions while meeting compliance standards. This can help boost employee productivity; the consolidated customer information and loan details provides a 360-degree view of the overall financial relationship and deal structure. Bank associates can manage and expand relationships and target product recommendations based on customer needs.

An Omnichannel Environment for Lending
The technology and analytics of an omnichannel environment gives banks a competitive advantage when it comes to loan origination. Applicants can shop and compare loan options, submit loan applications and receive real-time automated decisioning and status updates.

An omnichannel ecosystem provides seamless start, save and resume cross-channel application processing: customers can begin the research and application process on a mobile device, continue the application and upload documents on an alternate digital device, and engage live assistance from contact center or branch lending specialists without losing their progress. The technology can guide customers and staff members through each phase, improving customer engagement by triggering staff actions and automating workflows. Digital capabilities intertwined with human engagement increases staff productivity and efficiency through analytics and workflow.

The omnichannel approach balances technology and human resource allocation based on customer need and complexity. Technology automates business criteria to issue decisions in real time or have the loans manually reviewed by underwriters, if warranted. Applying decisioning analytics allows banks to strengthen governance, risk and compliance by establishing proof of process. An omnichannel delivery environment that drives the application and origination process gives banks a way to provide a seamless lending experience that meets customers’ needs.

Insights Report: The Secret to Success in Banking as a Service

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Banking as a service can bring in more revenue, deposits and customers for community banks. But it can also increase compliance burdens and potential risk.

Banking as a service, or BaaS, is an indirect banking relationship where a financial institution provides the back-end servicing for a company that intermediates with retail customers. Today, most of these relationships occur online — the third party brings in customer deposits, payments transactions and loans in exchange for fees associated with the arrangement. In turn, the bank houses the relationship, facilitates the transactions, and takes the lead on compliance and oversight.

“Banks are outsourcing significant compliance duties to the third party, and they’re taking on risks that are new and different from their direct business because they are providing their banking services indirectly,” says James Stevens, a partner and co-leader of Troutman Pepper’s financial services industry group.

Banking as a service isn’t new, although technology has made it easier for institutions to build out this business line. Sioux Falls, South Dakota-based Pathward N.A., a subsidiary of $6.7 billion Pathward Financial, has been in this space for about two decades. The bank sees its legal and regulatory compliance management system as a “core strength” fueling its innovation with partners, says Lauren Brecht, senior vice president and managing counsel of credit and tax solutions at the bank.

That’s because institutions interested in offering a BaaS business line must walk a fine line of responsible innovation and robust third-party risk management. Executives should understand that they can’t outsource their oversight responsibilities. That’s why it’s so important that banks create robust, “top-down” third-party vendor risk management policies and procedures that specifically address BaaS concerns, Stevens says. He also recommends that banks invest in personnel and systems that can handle the oversight and compliance functions “way in advance” of any partnerships.

“Banks are always going to be the ones left holding the bag, from a regulatory and compliance standpoint,” Stevens says. “It’s incumbent upon them to not only do due diligence and establish a good contractual relationship with their partner, but to also have the capability to manage and oversee it over time to manage those risks.”

To download the report, sponsored by Troutman Pepper, click here.

The Banking as a Service Insights report was originally published in the second quarter 2023 issue of Bank Director magazine.

The Cannabis Banking Outlook for 2023

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The U.S. cannabis market is expected to continue its growth in 2023, with projected sales of $72 billion a year by 2030. That’s more than double the current market estimation of $32 billion annually. Today, 21 states and the District of Columbia allow adult cannabis use. According to the Pew Research Center, 43% of U.S. adults now live in an area that has legalized cannabis use. While not every state that has legalized cannabis use saw growth last year, the market as a whole continues to expand.

Meanwhile, last fall, President Joe Biden announced pardons for simple cannabis possession at the federal level and ordered a review of federal cannabis scheduling under the Controlled Substances Act. According to a recent survey from Data for Progress, the majority of likely voters support legalizing cannabis at the federal level.

But as the market expands, access to banking continues to lag. Congress has failed to pass the SAFE Banking Act, a bill aimed at normalizing banking for licensed cannabis businesses. Despite the lack of legislative progress, a playbook exists for banks to serve the industry in compliance with FinCEN guidelines; bank examiners continue to recognize the work banks are doing to meet their compliance obligations. Bankers considering this line of business can have confidence that the cannabis use space will continue to grow and keep banking services in high demand.

Three Trends to Watch
As the industry expands and attitudes toward cannabis evolve, financial institutions are facing new competition and pressures on their business models. We are seeing three significant changes.

  1. Cannabis industry consolidation is creating businesses that need access to the balance sheets that bigger banks can provide. As a result, larger financial institutions are entering the space. There are more financial institutions in the $1 billion to $10 billion assets space actively serving the industry today, along with a few banks with over $50 billion in assets. Considering just a few years ago these institutions were predominantly less than $1 billion in assets, this is a significant shift that gives cannabis businesses greater choice.
  2. Early entrants that gained cannabis banking expertise in their home market are leveraging that proficiency to provide services across entire regions, or nationally in states with legal cannabis programs. Some of this is driven by consolidation, as bankers follow their customers into other states. Others are seeking new customers in underserved or newly minted cannabis markets.
  3. Lending, both directly to operators and indirectly to landlords or investors, has emerged as a critical component of the cannabis banking portfolio. Not only is this a competitive differentiator for banks, it is also as a prime source of earning assets and a way to gain additional yield. Like all lending, however, it is important to understand the unique credit risks in this industry, which can vary greatly from state to state.

Competition Demands a More Customer-Centric Approach
Competition is creating pressure on financial institutions to operate more efficiently while delivering more client-centric services. When it comes to meeting compliance obligations, banks that employ strategies that achieve greater efficiency can dramatically lessen the burden on both their bankers and their customers. There’s now more clarity about what information offers the most value for risk management teams; bankers can tailor their compliance requirements to reduce risk and avoid creating unnecessary work streams. Technology that automates compliance tasks and aids in ongoing monitoring can also contribute to a better customer experience. As cannabis operators face increased competition and tighter margins, financial institutions that take steps to minimize the compliance burden can gain a competitive advantage.

Financial institutions are also introducing new pricing strategies to attract customers. Historically, banks priced these services strictly to offset or monetize their compliance function. Now, bankers can use pricing tools to benefit customers while creating value for the institution. For example, offering account analysis can encourage customers to maintain higher balances while generating noninterest income on accounts with lower balances.

The past year brought about significant economic and policy changes in the cannabis industry. In 2023, bankers can act with even greater certainty in the industry’s stability, investing in the processes, services and technologies that will improve the customer experience while supporting the institution’s bottom line. As financial institutions and regulators gain a deeper understanding of the compliance requirements for this industry, it is increasingly clear that the industry is not going backward. States that have legalized cannabis and are issuing new licenses offer banks an ever-growing opportunity to tap into the industry’s financial rewards with the confidence that positive momentum is on their side.

Time to Automate All Bank Processes

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The uncertain economic environment, with a recession likely on the horizon and inflation driving up costs, has given banks a unique opportunity: revisiting their existing compliance and operational systems, and exploring long-term, scalable solutions in response to looming and increasing regulatory pressure.

Leveraging machine learning and automation to power digital transformation can address the concerns that keep bank directors up at night — especially since financial institutions may be expected to begin providing more data over the coming months. This comes at a time when banks are dealing with a number of external challenges; however, bank directors know they cannot skimp on adherence to strict compliance requirements. Missing a revenue goal is unfortunate, but from what we’ve heard from our customers, missing a compliance requirement can be a devastating blow to the business.

Increasing Regulatory Risk
Banks and other lenders may encounter financial strain in adding more compliance staff to their teams to address new regulations. Among them, Section 1071 of the Dodd-Frank Act requires financial institutions to report demographic information on small business loans. Regulators are reworking the Community Reinvestment Act. In response, banks are considering how they can leverage automated compliance systems for fair lending, loan servicing and collections.

Bankers are quick to acknowledge that the manual processes involved in data verification should be eliminated if their institutions have any hope of staying ahead of the curve. Furthermore, labor shortages and increased competition for talent has increased costs associated with these tasks — yet their necessity is imperative, given regulatory scrutiny.

As loan originations decrease during an economic slowdown or recession, it may look like delinquency rates are increasing as the ratio of delinquent loans to originations increases — even with no notable changes in delinquency cases. The increasing ratio could trigger scrutiny from the regulators, such as the Consumer Financial Protection Bureau.

If that happens, regulators look into whether the borrower should have received the loan in the first place, along with any fair lending bias concerns, and whether the bank followed appropriate procedures. Regulators will scrutinize the bank’s loan servicing and collections compliance procedures. Given that traditional manual reviews can be more inconsistent and vulnerable to human error, this becomes an incredibly risky regulation environment, especially where data integrity is concerned.

To mitigate risk and increase operational efficiency, banks can use end-to-end document processors to collect, verify and report data in a way that adheres to existing and pending regulation. Implementing these processes can eliminate a large portion of time and labor costs, saving banks from needing to recruit and hire additional compliance professionals every time fair lending and servicing requirements become more demanding.

Automated Processing
Lenders like Oportun, a digital banking platform powered by artificial intelligence, have found that leveraging intelligent document processing has reduced the cost of handling physical documents and traditional mail by 80%, increased margins, lowered instances of human error and improved data integrity. Enhancing customer experiences and providing quality data are crucial for Oportun; this makes their operational goals more cost-effective and scalable, and increases the capacity for Oportun’s team.

“[Automation] has helped us establish some strong controls around processing mail and servicing our customers,” Veronica Semler, vice president of operations at Oportun, says. “It’s reduced the risk of mail getting lost … it has increased our efficiency and made things easier for our team members in our stores.”

Institutions that leverage automated systems and machine learning for compliance can reduce labor costs, provide customers with high quality, efficient service and deliver accurate data to regulators. This provides companies like Oportun, which was an early adopter of machine learning, with an advantage over competitors that use traditional manual review methods.

Implementing document automation into existing systems allows banks to address compliance concerns while laying the groundwork for growth. Automation systems provide the tools for banks to reduce friction in lending and operations, enhance their controls and reduce human error — giving boards confidence that the bank can provide accurate, quality data ahead of any new fair lending and servicing regulations. Now is the time for boards and executives to recession-proof their banks and facilitate long-term success by investing in automation for document processing.

The Merger Compliance Issue You May Not Have Considered

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2022 will clearly be a challenging year for bank mergers, with the marketing and communication tools requiring extra attention and effort.

Government agencies continue to review bank mergers more closely; one area impacted by the growing oversight climate is the marketing and communication banks use to announce mergers and welcome newly acquired account holders. These tools are the first items and messages that account holders and staff encounter, but are far too often, they are the last thing bankers review in the process of completing a merger.

When we discuss merger communication planning and execution with our clients, both pre- and post-purchase, we spend the most time talking about the following three issues:

1. Getting solid, manageable, actionable data from the acquired institution
We find that many financial institutions that are acquired have been anticipating such a transaction for a number of years. As such, core systems and files may not be completely up to date; investments in technology upgrades and certain housekeeping details may have been deferred or even scrapped.

On the top of that list is the master  customer information file, or MCIF, or scrubbing the core database for customer contact details and transaction history. The prime culprit is e-Statements; their popularity has reduced the number of mailed physical statements, which generate a change of address notification if they’re returned. Fortunately, there are a number of tools and strategies available to fix this problem. We also encourage our clients to explore this during the pre-purchase phases, in case updating the data requires a costly solution that needs to be negotiated into the final deal. We believe regulators may want to know that customers have received these disclosures — having the right address is a big part of that.

2. Weaving customer advocacy into welcome materials
The new compliance culture is driving more concise and clear messaging for the account holder; the primary contact points coming through online or web communications, along with printed welcome material that goes out with the disclosures. This does not mean “dumb down” your messaging; it is our opinion that this includes presenting the account holder with impact points and advocacy in the clearest possible terms. This is a direct response to the new wave of consumer awareness and advocacy that we see in other parts of banking, like mortgage.

Specifically, in the welcome materials, there is a balance between brand and awareness messaging and instructions for the new account holder. Banks must adjust this combination to create an even mix of both. When in doubt, perfect the message towards the account holder. We advise our clients to consider including strong presentations concerning:

  • What is changing and when.
  • Different methods for getting questions answered or product help.
  • Clear explanations of the features and benefits offered to the account holder.
  • Introduction to new services like digital banking.

Serial acquirers should pay close attention to this; they can fall into the trap of dusting off the material from the last merger, making a few adjustments and moving along. It is our observation that material that may have been delivered more than six months ago may not meet current regulatory oversight needs. (Check out our article in the first quarter 2022 issue of Bank Director magazine for more on this important issue.)

3. Personalization
We struggle to understand why financial institutions send out large — more than 30 pages, in addition to the disclosures — welcome information kits. It is not only much more expensive than necessary and environmentally unfriendly — it makes it harder for the consumer to find the information that applies to them.

There are two parts to this. First, print-on-demand materials means creating welcome kits can be as economical as static materials in all but the smallest mergers. Second, this setting allows you to target the right message to the right household or business. This allows the acquirer to get solid data, complete account mapping and tackle the most challenging task: programming the algorithms to make sure the right material gets to the right household or business.

Using Modern Compliance to Serve Niche Audiences

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Financial institutions are increasingly looking beyond their zip code to target niche populations who are demanding better financial services. These forward-thinking institutions recognize the importance of providing the right products and tools to meet the needs of underrepresented and underbanked segments.

By definition, niche banking is intended to serve a unique population of individuals brought together by a commonality that extends beyond location. A big opportunity exists for these banks to create new relationships, resulting in higher returns on investment and increased customer loyalty. But some worry that target marketing and segmentation could bring about new regulatory headaches and increase compliance burdens overall.

“The traditional community bank mindset is to think about the opportunity within a defined geography,” explains Nymbus CEO Jeffery Kendall. “However, the definition of what makes a community has evolved from a geographic term to an identity or affinity to a common cause, brand or goal.”

Distinguishing the defining commonality and building a unique banking experience requires a bank to have in-depth knowledge of the end user, including hobbies, habits, likes, dislikes and a true understanding of what makes them who they are.

Niche concepts are designed to fill a gap. Some examples of niche concepts geared toward specific communities or market segments include:

  • Banking services for immigrant employees and international students who may lack a Social Security number.
  • Banking services geared toward new couples managing their funds together for the first time, like Hitched.
  • Payment and money-management services for long-haul truck drivers or gig economy workers, like Gig Money or Convoy.
  • Banking platforms that provide capital, access and resources to Black-owned businesses.

Targeting prospective niche communities in the digital age is an increasingly complex and risk-driven proposition — not just as a result of financial advertising regulations but also because of new ad requirements from Facebook parent Meta Platforms and Alphabet’s Google. Niche offerings pose a unique opportunity for banks to serve individuals and businesses based on what matters most to them, rather than solely based on where they live. This could impact a bank’s compliance with the Community Reinvestment Act and Home Mortgage Disclosure Acts. The lack of geography challenges compliance teams to ensure that marketing and services catering to specific concepts or customers do not inadvertently fall afoul of CRA, HMDA or other unfair, deceptive or abusive acts or practices.

Niche banking enables financial institutions to innovate beyond the boundaries of traditional banking with minimal risk. Banks can unlock new revenue streams and obtain new growth by acquiring new customers segments and providing the right services at the right time. When developing or evaluating a niche banking concept, compliance officers should consider:

  • Performing a product and services risk assessment to understand how the niche banking concept deviates from existing banking operations.
  • Identifying process, procedure or system enhancements that can be implemented to mitigate any additional compliance risk incurred by offering new solutions to customers.
  • Presenting its overarching risk analysis to cross-functional leads within the organization to obtain alignment and a path forward.

Now is the time for financial institutions to start asking “Did I serve my consumers?” and stop asking, “Did I break any rules?” When I led a risk and compliance team for a small financial institution, these were questions we asked ourselves every day. I now challenge financial institutions to reassess their current models and have open conversations with regulators and compliance leaders about meeting in the middle when it comes to niche banking. With the appropriate safeguards, banks can capitalize on the opportunity to deliver innovative, stable and affordable financial services.