The good news is that Banks have an enormous opportunity. The bad news is that the first steps to grasp that opportunity have yet to be taken.

One important reason for escalating costs is that many financial institutions have not taken advantage of the overlapping elements of the requirements they face, such as Sarbanes-Oxley, Basel, and the USA PATRIOT Act.

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many financial institutions have replicated compliance practices in individual lines of business, which has resulted in similar processes, procedures, and requests for information being multiplied across the enterprise.

This is an astonishing report for me. I have witnessed what they speak of, yet I assumed is was ‘just us’. Turns out Banks generally have not embraced technology to address compliance. In fact I recall blogging a while back about the opportunity to get a two for one, by gathering customer data in meaningful ways for customers, and get the compliance needs at the same time. I suspect Wells Fargo, the example I used a couple of years ago, are somewhere down that road, when they introduced their spending analysis product.

The report, which is US focussed, yet introduces concepts that are generic speaks of Sarbanes-Oxley, Basel, and the US Patriot Act. Banks are typically implementing teams to address each of those indivdually, and missing opportunities to address cohesively.

Furthermore, Banks are addressing those matters with people. They have largely not introduced technology to address. Clearly this is a mistake; people are a forever cost, and technology is a depreciatable cost that is one time, and replaces people cost if done correctly.