The cost for community banks to keep up with regulatory changes rose over the past quarter thanks to increased labor costs. Costs have fallen, however, over the prior year.
The average financial institution classified as a community bank needed the equivalent of 1.86 full-time employees to manage new regulatory changes during the period.
That worked out to an additional 653 hours by employees of the average community bank to keep up with the new regulations.
The findings were based on the Banking Compliance Index from Continuity Control.
Banks faced 82 regulatory changes from July 1 through Sept. 30, according to the report.
The average cost of complying with the changes was $45,264.
In the prior three-month period, just 1.48 full-time employees were needed to ensure compliance with new regulations.
“The number of regulatory changes last quarter reached the highest level we’ve seen since 1995,” Pam Perdue, executive vice president of regulatory insight at Continuity Control, said in the report. “Even when the changes are minor in scope, they require time to identify, analyze, and implement. Up ticks like these historically have forced banks to add headcount and divert time, money and staff from more profitable areas.”
But despite the increase in regulatory changes, the average number of full-time employees needed to comply was less than the 2.34 in the third quarter of last year.
