BANKING INDUSTRY BRACES FOR REGULATORY OVERHAUL IN 2022

Washington D.C., USA - Regulatory Landscape Shifts in Focus

The banking industry is preparing for a busy year ahead as regulators gear up to tackle key issues, including consumer protection, cybersecurity, and cryptocurrency. With numerous regulatory changes on the horizon, financial institutions must be proactive in managing these shifts to ensure compliance and competitiveness.

Fees Under Scrutiny

Regulators will focus on fees that may hinder consumers’ ability to shop for credit, ensuring a level playing field for consumers and promoting fair competition among lenders. This increased scrutiny is expected to lead to changes in fee structures and consumer protection measures.

Cybersecurity Remains Top Concern

Cybersecurity remains a top priority, with 63% of respondents in Wolters Kluwer’s latest Indicator survey citing it as a significant consideration in their enterprise risk planning. The Federal Trade Commission (FTC) has recently updated its Safeguards Rule under the Gramm-Leach-Bliley Act, requiring financial institutions to develop and maintain comprehensive security systems to protect customer information.

Cryptocurrency Market Under Regulatory Scrutiny

The Securities and Exchange Commission’s Chairman Gary Gensler has warned of rampant fraud and abuse in the cryptocurrency market. Regulators are urging supervised institutions to prioritize safety and soundness, consumer protection, and compliance with applicable laws and regulations.

Operational Risk Management a Priority

Bank regulators will pay close attention to operational risk, resilience, incident response, data recovery, and business resumption. Financial institutions must invest in robust regulatory change management programs and Compliance Management Systems with updated policies and procedures to ensure compliance and competitiveness.

Innovation and Fintech Partnerships Drive Industry Growth

Innovation and fintech partnerships will continue to shape the banking industry, driving growth and increasing competition. Financial institutions must stay ahead of emerging trends and technologies to remain competitive.

Consolidation is expected in the smaller bank segment, with increased scrutiny on merger activity. The ongoing effects of the pandemic will continue to burden financial institutions, requiring them to adapt and innovate to stay afloat.

Key Takeaways

Fees that may hinder consumers’ ability to shop for credit will face increased scrutiny
Cybersecurity remains a top concern, with 63% of respondents citing it as a significant consideration
Cryptocurrency market faces regulatory scrutiny over fraud and abuse concerns
Financial institutions must prioritize operational risk management and Compliance Management Systems
Innovation and fintech partnerships will continue to shape the banking industry
Consolidation is expected in the smaller bank segment, with increased scrutiny on merger activity
The ongoing effects of the pandemic will continue to burden financial institutions