Regulators Deem Strategic Risk a Top Concern / Is Reputation Everything?

By: Sharon J. Lorman
Jeffrey P. Marsico
Richard B. Trauger, Jr.

Podcast Show Notes:

Our This Month In Banking (TMIB) podcast features discussion with colleagues and other industry thought leaders on interesting banking news that happened this month. TMIB will be available on the last Wednesday of every month here, and on Apple and Droid podcast apps for your listening enjoyment. Join us on your commute or at your desk.

Topic 1: Regulators Deem Strategic Risk a Top Concern
Start time 1:38
The Office of the Comptroller of the Currency (OCC) reported that strategic, credit, operational, and compliance risks remain top concerns for banks in its Semiannual Risk Perspective for Fall 2016, released in January 2017. In his remarks concerning the Semiannual Risk Perspective, Thomas Curry, Comptroller of the Currency said that “Strategic risk remains a key risk for banks of all sizes. Banks are adopting more innovative products, services, and processes in response to the evolving demands for financial services and the entrance of new competitors, such as out-of-market banks and financial technology firms. In addition, some banks are considering business model changes, including mergers and acquisitions, as they search for acceptable returns in a prolonged environment of low interest rates. And, in some cases, banks face issues with succession and long-term planning.”
Regulators are placing greater focus on banks’ strategic plans. Can your bank’s strategic plan stand up to the test?

Topic 2: Is Reputation Everything?
Start time 21:10
This month Wells Fargo’s Board of Directors released the findings of an independent investigation into the Company’s retail banking sales practices. The report is the result of a seven-month investigation by Wells Fargo’s board of directors into the root causes of improper sales practices in the Community Bank. The investigation identified factors that led to the sales practice issues, and led to claw back of $75 million in compensation from the Bank’s former CEO and former head of Wells’ community banks. Several days prior to the release of the report, the OCC removed the most senior bank examiner for Wells from his position.
Will the scandal affect Wells’ long term financial performance?

Watch for episode 17 of This Month in Banking to be released on Wednesday, May 31, 2017 and a new episode on the last Wednesday of every month.

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