Key insights
- It’s important to adhere to regulations to help avoid penalties and safeguard your organization's reputation, with a focus on climate-related financial risks and consumer compliance.
- This year’s trends highlight the need for robust cybersecurity measures to protect sensitive financial data and maintain customer trust, including data classification, governance, and managing third-party risks.
- Current techniques to evaluate and manage credit risk stress the importance of customer due diligence and appropriate investigation standards to detect and prevent suspicious activities.
Help your financial institution plan next year’s strategies.
As we approach the end of the year, it’s essential to reflect on the significant trends and insights that shaped the financial services industry. Understanding year-end trends can help your institution plan strategies for the upcoming year, identify emerging opportunities, prepare for potential challenges, and allocate resources effectively.
Explore an overview of some key areas of focus for financial institutions seeking insights to support informed decision-making and strategic planning.
Regulatory compliance and financial risk
With recent headlines highlighting the importance of adhering to regulations, it’s crucial to implement measures that help avoid penalties and safeguard your organization’s reputation.
The Office of the Comptroller of the Currency (OCC) has published its regulatory priorities for 2025, which include climate-related financial risks, third-party risks, and consumer compliance.
Over the last 12 to 18 months, regulatory conversations have frequently centered around liquidity, interest rate risk, and asset liability management. These topics are more prominent than ever before, reflecting the evolving focus of regulators.
Additionally, the OCC’s emphasis on climate-related financial risks is particularly relevant for institutions operating in states with specific mandates, such as California. Third-party risks and consumer compliance have also garnered significant attention, with recent media headlines underscoring their importance.
Cybersecurity and data governance
Cybersecurity is crucial in today’s digital age. Financial institutions must protect sensitive financial data to maintain customers’ trust. Effective measures include data classification and governance, standards-based operations, and managing third-party risks. Hackers are generally after data they can monetize, making robust cybersecurity measures essential.
Cybersecurity is not just about preventing breaches but also about managing data responsibly. This involves developing and maintaining data inventory, understanding where customer or member personally identifiable information (PII) is stored, and making sure it’s used appropriately.
Financial institutions must also navigate overlapping and sometimes confusing privacy rules from different states and countries, making data governance a complex but necessary task.
Managing credit risk
Managing credit risk is vital for supporting financial stability. Evaluating and managing credit risk involves understanding customer behavior and implementing appropriate investigation standards. This includes customer due diligence (CDD) and knowing your customer practices to align financial activities with customer profiles.
The final rule on beneficial ownership, which came out a few years ago, has reinforced the importance of CDD. Financial institutions must ask pertinent questions about the purpose of accounts and the nature of transactions to detect and prevent suspicious activities. Poor investigation standards can lead to significant risks, making it essential to conduct thorough and appropriate investigations.
How CLA can help with strategic planning
Key concerns such as the cost of funds, regulations, and margins are expected to remain relevant in 2025. Digital transformation and technology investment, in particular, will be critical for maintaining competitiveness and improving customer experience. The OCC’s focus areas will likely influence other regulatory agencies, making it crucial for financial institutions to stay prepared.
Whether you need data cleansing, a readiness assessment, connections across your systems, or an actionable dashboard, our industry and digital professionals can help you make confident, data-based decisions.
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