Bank regulatory supervision is shifting
Why governance, risk appetite, and internal audit still matter
Regulation is recalibrating and supervision is being reprioritized, making strong risk management and effective governance by the board and senior management more critical than ever. We recommend institutions embrace this period by reassessing their strategy, risk appetite, and recalibrating frameworks and practices. In our experience assisting financial institutions, now is a good time to test, learn, and invest while sustaining the risk management focus built over the past several years.
Regulatory pendulums continue to swing; how can you prepare?
As administrations change and market dynamics evolve, regulation often swings between more restrictive and more permissive environments. How might this affect your strategic planning, regulatory change management, and business cycles?
You can see this regulatory swing in how agencies are resetting expectations by size and scale, and in how chartering and merger pathways are being evaluated. Where do you see the biggest opportunity—and the biggest risk—as expectations reset?
Operating flexibility doesn’t reduce accountability
Even as the regulatory landscape shifts, leaders should be cautious about dialing back investment in risk management and governance.
To support continued strong risk management and governance, practical steps could include:
- keeping risk frameworks and risk appetite metrics current
- investing in management information systems (MIS) and data quality to connect relationships and exposures end to end
- sustaining reliable internal audit capacity
Leaders can also align incentives and staffing so risks are identified, escalated, and remediated quickly without unnecessarily constraining innovation or growth.
Controlled growth starts with the same discipline
This shift in supervision may create room to move faster, but it shouldn’t mean less discipline. Explore our insights on practical actions financial institutions can take to support controlled growth without compromising resilience.
Irena Gecas-McCarthy
