Compliance costs the credit union industry billions of dollars annually—and that figure is only expected to rise.
While compliance is essential to ensure the protection of both your credit union and its members, the increasing complexity and volume of regulations present a significant financial burden.
The real challenge for many credit unions lies in finding effective strategies to manage these costs, which are becoming harder to control. Without proactive measures, these expenses could jeopardize your credit union’s long-term sustainability.
Do you feel like your credit union is spending too much on compliance? You’re not alone. According to a recent study, 70% of financial institutions are now prioritizing strategies to cut compliance-related costs.
Source: LexisNexis Risk Solutions
So why is compliance so expensive for credit unions, and what can be done about it?
There are a few key reasons driving the rising compliance costs in the credit union industry:
Compliance costs don’t have to be an unmanageable burden. With the right strategies in place, your credit union can reduce its compliance expenses and streamline its processes.
Here are five effective ways to tackle the cost of compliance:
Automation is one of the most impactful ways to cut down on compliance costs.
By automating routine tasks like reporting, data collection, and document management, you can save both time and money.
This not only reduces the chance of human error but also frees up your team to focus on higher-priority compliance issues. When implemented correctly, automation can be a game-changer for your credit union’s compliance efforts.
Not all compliance issues are created equal, and not every regulation deserves the same level of attention.
By adopting a risk-based prioritization approach, you can allocate resources more effectively. Focus on the compliance issues that present the highest risk to your credit union and address them first.
This customized approach ensures that you’re addressing what matters most, without wasting time or resources on less critical issues.
Compliance shouldn’t be an afterthought—it should be integrated into your credit union’s everyday operations. Whether it’s during meetings, new employee onboarding, or routine workflows, embedding compliance into daily tasks helps reduce the need for expensive training sessions.
When compliance is part of your culture, it becomes easier to manage and less costly over time.
Keep Reading: How to Create a Culture of Compliance at Your Credit Union
Your credit union’s policies and procedures might be outdated or unnecessarily complex, which can lead to inefficiencies and extra costs.
By revisiting and streamlining these policies, you can identify and eliminate waste.
This allows your team to focus on what matters most, ensuring your compliance efforts are both effective and cost-efficient.
Financial crime compliance is becoming one of the fastest-growing costs for financial institutions. A recent study revealed that nearly all (99%) of financial institutions reported rising costs for managing financial crime-related compliance.
Source: LexisNexis Risk Solutions
By focusing on cybersecurity and staying up to date with the latest regulations, your credit union can prevent costly breaches and reduce the overall compliance burden. A proactive approach to cybersecurity ensures that you’re prepared for the challenges ahead.
With the right strategies, your credit union can reduce the financial burden of compliance while still staying fully compliant.
Compliance may seem overwhelming, but it doesn’t have to be a solo effort. FLEX offers a variety of compliance services designed to support your credit union and help manage compliance more efficiently.
Click the button below to download FLEX’s free eGuide and discover how our compliance services can help your credit union today!