Bridging the Compliance Talent Gap

POSTED on November 12, 2019 IN ViClarity

An option that is increasingly embraced by credit unions is partnering with an outside firm to manage at least a portion of the compliance strategy and duties, to help fill the talent gap.

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Among the many transformational changes that have surrounded regulatory compliance for credit unions over the past decade has been an ever-growing need for staff members with comprehensive compliance backgrounds.

The amount of qualified people has simply not kept up with demand, creating a serious talent gap and confronting credit unions with a major challenge in finding the people they need to ensure ongoing compliance.

One reason for that gap is the pace at which the compliance discipline has evolved. Just a decade ago, compliance specialists managed only a few regulatory changes each year. Now change is constant and keeping up with it is critical to credit union success.

Because of the importance of compliance management to a broader enterprise risk management strategy, credit unions must be able to keep up with and manage regulatory changes. If they can’t, they could face dissatisfied members, loss of business, fines, and even lawsuits.

The Hiring Problem

When a credit union hires inexperienced compliance professionals, there is a time lag and additional costs associated with training and ongoing development before those new hires can be operating at full speed. Credit unions with truly urgent needs are in even worse situations.

As they strive to keep up with regulations and proposals, the pressure is on credit union staff to master the intricacies of multiple financial products and services. One approach for many credit unions is to expand the duties of their operations team to include compliance. The rationale is that since these individuals have a broad understanding of all aspects of the credit union, they are in a good position to manage the impact of rules across the institution. Sometimes that works, but more often it fails to mitigate the need for true compliance specialists.

An option that is increasingly embraced by credit unions is partnering with an outside firm to manage at least a portion of the compliance strategy and duties, to help fill the talent gap. That works not only for credit unions as they build their compliance team, but also for those institutions that need temporary assistance or ongoing specific expertise.

Even credit unions fortunate enough to have found and hired the expert compliance talent they wanted can face the same hiring challenges if one or more members of the compliance team leave the institution or retire. Retaining the best people is difficult when everyone is fishing in the same pond.

Weathering the Storm

Partnering with an outside firm for at least some of the compliance strategy execution and daily duties is helping many credit unions weather the compliance talent gap. They have access to a ready-made team of compliance experts that can address their precise needs.

Those needs might be temporary, such as the need to address audit findings, or longer term, involving the strategic implementation of regulatory requirements across departments and continuing oversight of regulatory changes. A compliance partner can supplement staff execution of short-term needs and assist a credit union in developing a broad compliance management system.

5 Tips for Success

If your credit union chooses to partner with a compliance firm, here are five tips to improve the outcome:

  • Start by designating a main point of contact. This individual might be a compliance specialist with a lower level of expertise but a good general understanding of compliance requirements.
  • Be sure that person is comfortable as the liaison between the compliance firm and various department heads, as well as setting priorities and sharing the credit union’s goals with the partner firm. 
  • That contact person can also function as an efficiency monitor, gathering up questions, documents, and projects for delivery to the compliance partner.
  • Consider combining a compliance firm with in-house expertise. You can limit the stress of a talent hunt in this way. Individual departments, for instance, may be able to obtain an adequate degree of compliance knowledge for their specific products. 
  • Rely on the compliance partner for staying up to date on regulatory changes, offering counsel on implementation, and providing independent insight into areas needing improvement.

A new PolicyWorks white paper, Bridging the Talent Gap in Credit Union Compliance, addresses the problem that credit unions face and offers insight into how they can confront the problem.


Miriam De Dios Woodward is the CEO of PolicyWorks, LLC. 

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