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#748660 - 06/07/07 02:20 PM Process for involving compliance on new initiative
Analauditor Offline
Junior Member
Joined: Aug 2005
Posts: 44
Seems like we are always the last to know about a new initiative. You know, something arrives on your desk about a new product and 'they' want your sign-off the next day (if you are lucky)!

Does anyone have a system that works for you where all the applicable parties are notified well in advance? What about policies/procedures/checklists? I am open to anything that would help us get our arms around this.

Thanks.

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#748680 - 06/07/07 02:37 PM Re: Process for involving compliance on new initiative Analauditor
Andy_Z Offline
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This goes to the core. Compliance needs involvement directly or indirectly with business development and marketing as this is where these things often start. If your new products are started in a managers meeting or elsewhere, that is where you need to be.

It may be that compliance attends those meetings, reviews minutes or that you get reports from someone attending on issues you need to know about. Management should also ensure that in the process of development compliance was consulted the same as IT, marketing, training, etc.

New products aren't a secret and shouldn't be treated as such. And never, never bless off on something because it launches tomorrow. Do so only because it is right.
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AndyZ CRCM
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#748776 - 06/07/07 03:46 PM Re: Process for involving compliance on new initiative Andy_Z
MN Banker Offline
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Joined: Aug 2006
Posts: 980
Originally Posted By: Andy Z
And never, never bless off on something because it launches tomorrow.


This is essentially how I finally got everyone to realize I needed to be involved from the beginning. When I first started at the bank, I wouldn't find out about things until just before they implemented it (and sometimes, even after).

I'd usually end up taking it back to them and say you forgot about this, that, and the other thing, and you absolutely can't offer it until it's fixed. It usually caused everyone to scramble to fix things and caused so much chaos that they now finally come to me at the beginning in order to avoid wasting time.

It takes time, but I kept pushing and finally got my point across (most of the time...)

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#748793 - 06/07/07 04:05 PM Re: Process for involving compliance on new initiative MN Banker
8675309 Offline
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Joined: Jun 2004
Posts: 1,115
Where the wind comes sweeping ...
You could create compliance approval procedures and get your supervisor to endorse them then distribute to all those involved. You could include items like:

Information needed for new loan product compliance review:
- Product specs
- Marketing materials
- Sample forms and docs
- Test account

Response time:
Once all items above are received, compliance will respond in no more than 5 working days.

You could also create a compliance review request form with checkboxes. This would be good for stuff like advertisements.

Being a marketing person, I like having clear guidelines on turnaround times. If I know that compliance will respond in a maximum of 2 days, I can work backwards from there in determining when I need to submit something.

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#749515 - 06/08/07 02:38 PM Re: Process for involving compliance on new initiative Analauditor
Richard Insley Online
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Richard Insley
Joined: Oct 2000
Posts: 10,179
Toano, VA
Original poster- Since you are an auditor and are operating in the review/criticize mode, you will never get your arms around the problem. Your system has a fundamental flaw--your marketing and business people do not treat you as a part of their planning team because they view you as an auditor. If you cannot become a trusted member of the product development team you will never be able to step into the role that serves your bank best.

An effective compliance officer MUST have a seat at the table of every product development team in your bank. It's always faster and cheaper to design compliance into a product than to wait for a faulty product and spend more time and money fixing it. Also, trashing new products just when they're ready to roll out breeds ill will between the C/O and business managers.

As a participating member of the team, you have an obligation to find a way to make any reasonable idea work. As soon as there is a hint of a new product your duties begin. You must identify and report all legal & regulatory issues that are likely to affect the product's design. This roadmap will help other members of your team steer clear of known problems. As the product takes shape, you should be able to suggest (risk-rated, of course) options for meeting all the requirements imposed on the new product. It's also your duty to design controls into the new product. Since it's no surprise that your bank will need to advertise the new product in various media, you can go on offense here, too. An hour's worth of Googling should produce many other banks' online ads for similar products. Cull out the ones that violate the regs and email the URLs of the others to your team members.

Every minute you spend during product development can save everyone huge numbers of hours fixing errors later. It's always cheaper to do it right the first time!
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#750597 - 06/11/07 04:35 PM Re: Process for involving compliance on new initiative Richard Insley
Analauditor Offline
Junior Member
Joined: Aug 2005
Posts: 44
I realize the importance of being involved from the beginning. Just wondering how to do this as we have informally put the word out (and asked to be part of department meetings, task forces, etc). But we still have pockets of folks that just don't involve us. We find out later that a product or service is available.

Does anyone have a written policy they would like to share? Maybe if we reduce it to writing ...?

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#750650 - 06/11/07 05:24 PM Re: Process for involving compliance on new initiative Analauditor
Richard Insley Online
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Richard Insley
Joined: Oct 2000
Posts: 10,179
Toano, VA
The best way to establish a positive relationship is to bring value to projects and make the business manager in charge look good. Assuming your operating cost is not charged to the business units, you already have one advantage--you're free! To be useful while products are being developed, you need a thorough understanding of the servicing systems involved. (Nothing can kill a product idea faster than the prospect of manual servicing.) If you aren't already familiar with the type of product being developed, use your professional networks (including BOL) to learn all you can. Research all applicable regs, common violations involving these regs, and any enforcement actions taken against others who offer products similar to the ones you are developing.

Often, a simple inquiry will get you a standing invitation to any and all product development meetings. You may have to explain why it's good business to avoid trouble with the government, but most seasoned managers have learned this lesson. In tough cases, you might need to get your boss to help with the explanation. On one or two occasions, I invited myself to marketing meetings. A few feathers were ruffled at first, but soon the group saw the value of examiner-proofing the products under development. The turning point comes when your marketeers realize that you are there to manage the government, not advocate for government intervention in the bank's affairs.
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