Banking Industry Compliance Challenges in US Virgin Islands Persist Amid COVID-19 Pandemic

The banking industry in the US Virgin Islands is facing a challenging year ahead due to the ongoing impact of the COVID-19 pandemic on regulatory and public policy changes. According to a recent report by KPMG, compliance risk remains a top concern for banks in the territory.

Disruptions and Compliance Challenges

The pandemic has put a strain on compliance departments, with many resources being redeployed to address immediate operational needs and concerns. This has led to:

• High degree of waivers and exceptions: The rapid roll-out of complex government stimulus programs has added to the pressure on banks to maintain compliance amid evolving regulatory and supervisory expectations.
• Increased misconduct risks: Banks in the US Virgin Islands must contend with increased risks such as insider trading, PII use, fraud, and phishing.

Key Regulatory Challenges for 2021

The KPMG report highlights several key regulatory challenges that banks in the US Virgin Islands will need to address in 2021:

• Reprioritizing compliance activities: Banks must reprioritize compliance activities due to emerging disruption risks and resource constraints.
• Providing additional communications, training, monitoring, and data analysis: Regulators expect banks to maintain compliance amid new regulatory expectations by providing additional support and resources.
• Investing in the compliance function: Banks must invest adequate resources into the compliance function to address evolving skillsets and technology-enabled analytics.
• Leveraging technology-enabled analytics and digitized processes: Regulators emphasize the importance of leveraging data and analytics to enable real-time risk analysis.

Mitigating Risks through Robust Compliance Programs

By addressing these challenges and investing in robust compliance programs, banks in the US Virgin Islands can mitigate risks and ensure continued stability in the financial services sector.