BRENTWOOD, TENN., March 21, 2017 – Most bank executives and board members don’t want Congress and President Trump to totally dismantle the Dodd-Frank Act, according to Bank Director’s 2017 Risk Practices Survey, sponsored by FIS. Just 20 percent believe the law should be repealed in its entirety, a reflection of the significant investment made by the industry to comply with its requirements.
However, 82 percent of the 167 respondents—independent directors and senior executives of U.S. banks above $500 million in assets—expect to see regulatory relief this year. Many favor changes to the Consumer Financial Protection Bureau and other specific areas of Dodd-Frank, including the Durbin amendment, which restricts debit interchange fees at banks with $10 billion or more in assets, Home Mortgage Disclosure Act rules and qualified mortgage rules.
The survey was conducted in December 2016 and January 2017—following the presidential election but preceding the inauguration.
Other key findings include:
- Cybersecurity, for 85 percent, and compliance, for 61 percent, are identified as the top two areas of concern. However, just 17 percent indicate that their board reviews cybersecurity at every board meeting.
- Employee susceptibility to phishing or other types of social engineering schemes is the area in which the majority of respondents think the bank is least prepared for a cyberattack or data breach, at 57 percent.
- Two-thirds indicate that the bank has completed an assessment using the FFIEC’s cybersecurity assessment tool. Of those, 54 percent have independently reviewed and validated the results, and even fewer—37 percent—have established board-approved triggers for update and reporting.
- Financial institutions have made considerable improvements to cybersecurity programs over the past two years, including investments in technology to better detect and deter cyber threats (82 percent), improved training for bank staff (81 percent) and increased focus on cybersecurity at the board level (80 percent).
- Cross-selling has been top of mind for the industry. Seventy-seven percent say their board has discussed the Wells Fargo case and its potential impact on the bank. Of these, 42 percent have evaluated their bank’s incentive compensation programs, and the same number evaluated the bank’s retail sales culture or goals. Eight percent eliminated cross-selling programs.
- Thirty-five percent of respondents are not fully confident that the bank’s internal controls would flag unethical behavior.
- More than half of respondents indicate that risk performance—rewarding employees who stay within the bank’s risk parameters—is incorporated into management compensation. However, few incorporate risk performance into compensation for all employees. Almost one-third indicate that risk performance is not yet incorporated into compensation programs at the bank.
ABOUT BANK DIRECTOR
Since 1991, Bank Director has served as a leading information resource for the directors and officers of financial institutions. Through its print and digital editions of Bank Director magazine, executive-level research, annual conferences and its website, BankDirector.com, Bank Director reaches the leaders of the institutions that comprise America’s banking industry. Bank Director is headquartered in Brentwood, Tennessee.
FIS is a global leader in financial services technology, with a focus on retail and institutional banking, payments, asset and wealth management, risk and compliance, consulting, and outsourcing solutions. Through the depth and breadth of our solutions portfolio, global capabilities and domain expertise, FIS serves more than 20,000 clients in over 130 countries. Headquartered in Jacksonville, Fla., FIS employs more than 55,000 people worldwide and holds leadership positions in payment processing, financial software and banking solutions. Providing software, services and outsourcing of the technology that empowers the financial world, FIS is a Fortune 500 company and is a member of Standard & Poor’s 500® Index. FIS is ranked # 1 in Chartis RiskTech 100®. For more information about FIS, visit www.fisglobal.com.
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