Independent Banker - September 2022 - 33

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" Regulatory compliance is very
expensive and takes a lot of expertise
and manpower, " observes Thomas
Ko, senior vice president and general
counsel at $9.8 billion-asset Columbia
Bank in Fair Lawn, N.J.
" The great promise of regtech
solutions-if not necessarily always
the reality-is that they provide us
with a way to leverage fewer but more
sophisticated staff, " he says.
Shawn O'Brien, president at
solutions vendor QwickRate, agrees
that the talent pipeline is a growing
preoccupation for regulators and
community bankers. " In a number of
communities, replacement talent is
much more difficult to find, " he says.
" Many banks are not going to be able
to find homegrown talent, and so
they'll have to look to regtech. "
One more reason community
banks love regtech is that when new
compliance challenges arise, vendors
quickly innovate.
For instance, as community
banks scramble to meet the
" You can outsource the work or the tasking
side of things, but you can't outsource the
responsibility for vendor management and all
of the pieces that go into it. "
-ERIK LEMAY, CHARTER BANK
year-end deadline to report
expected credit losses as part of
new CECL compliance, QwickRate
added CECLSolver to its suite of
QwickAnalytics offerings. As of
June, says O'Brien, more than 350
community banks were using the tool
to " measure and anticipate credit
losses for the future. "
" It makes the process of trying to
estimate those reserve levels much
easier for the bank, " he explains.
" CECL is coming fast-and we've built
something to help the community
banks address this. "
Selecting the right vendor
Deciding to embrace regtech is one thing. But choosing a vendor?
That's a different challenge altogether.
Neil Katkov, a director at solutions vendor Celent, notes that
determining the right solution is complicated by the number
of regtech vendors popping up, even though he has found that
" only a handful have significant traction in terms of client bases. "
Whenever possible, he advises, community banks should opt for
vendors that have a solid customer base of clients using the latest
iteration of whichever solution is on offer.
Thomas Ko, senior vice president and general counsel at
Columbia Bank in Fair Lawn, N.J., advises bankers to listen critically
when a vendor is pitching a solution, making sure that what's
promised can actually be delivered. " Regtech products are getting
more sophisticated, " he says, " but sometimes the ambition is a
little bit greater than the delivery. "
Appreciating regtech's promise
Succeeding with regtech hinges on an
understanding of what regtech tools
can and cannot accomplish.
Charter Bank's LeMay takes time
to make sure leaders " don't have a
false sense of security that vendor
management is handled, and so we
don't have to worry about it. "
He continues: " You can outsource
the work or the tasking side of
things, but you can't outsource the
responsibility for vendor management
and all of the pieces that go into it. "
Columbia's Ko agrees: " I cringe at
the idea of a super lean and mean
bank where there's a couple of
bankers using regtech to eliminate the
need for intelligent management of
infrastructure. "
Both LeMay and Ko emphasize the
importance of educating the entire
bank on both the possibilities and the
limitations of regtech.
" Regtech is a set of tools, "
Ko says. " They can't magically
spit out decisions, but they can
let you leverage your people's
capabilities better. " 
Elizabeth Judd is a writer in Maryland.
independentbanker.org Q 33
http://www.independentbanker.org
Independent Banker - September 2022

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