In the 2012 KPMG Community Banking Outlook Survey, 47 percent of respondents identified regulatory and legislative pressures as the most significant barrier to growth over the next year, while 35 percent said regulatory compliance costs were having the greatest negative impact on financial performance. Additionally, 27 percent said that bank management’s top initiative in the next two years will be navigating significant changes in the regulatory environment.
“The new regulatory environment in which community banks now operate is a game changer because the cost of building the necessary compliance systems and processes is high,” said John Depman, national leader of Regional and Community Banking for KPMG. “As a result, many community banking executives are re-evaluating their business and operating models and growth strategies.”
Other challenges facing community banking executives, and discussed in this survey, include IT investments, mergers and acquisitions, capital requirements, and much more.