Before the coming of the pandemic, banks had been reducing the complications and costs that arose over the years as they dealt with escalating regulations and emerging risks by adding policies, processes, and people to their risk and compliance functions.
Then COVID-19 happened and threatened to complicate things all over again.
When banks shut branches and corporate offices, this altered how customers interact with them, forcing changes to long-held risk-management practices. Activities that typically happened in person were no longer possible, such as credit-committee meetings to approve underwriting for a new corporate client, or office visits by potential small borrowers to verify their creditworthiness or sign loan documents.
The banks’ risk-management functions, which act as a second line of defense between frontline employees who work directly with customers and the department’s backstop internal risk-audit teams, also had to adjust the way they operate. For starters,...
learn more
