Beneficial State Bank

Richard H Harvey, Jr. Executive Vice President, General Counsel, Director of Compliance Risk and Board Secretary

Advancing Compliance through Collaboration and Innovation

Richard H Harvey

Collaborative Compliance Champion

Richard H Harvey is a compliance leader specializing in risk-based compliance programs for banks and fintechs. He is a sought-after speaker at national and international conferences and seminars on compliance, anti-money laundering and risk management.

From Regulatory Enforcement to Compliance Leadership

I began my banking career as an enforcement attorney with the Federal Home Loan Bank Board, which later became the Office of Thrift Supervision. During six years in government, I traveled across the country to assess whether financial institutions were operating safely and soundly, issuing enforcement actions when necessary.

Later, I joined Chevy Chase Bank in Bethesda, Maryland, as a compliance officer, and progressed to roles including Chief Compliance Officer, BSA and AML officer, Chief Privacy officer, and Associate General Counsel. Over the course of my career, I have worked at eight banks, primarily in senior compliance and legal positions, and three fintech companies. These experiences led me to join Beneficial State Bank approximately six and a half years ago as  general counsel and director of compliance risk.

Embedding Compliance into Business Decisions

Compliance is integral to how financial institutions operate, ensuring controls are in place to manage and mitigate business risks. Success depends on the institution and its compliance team working in partnership, with compliance viewed as an enabler rather than a barrier.

My approach to compliance leadership centers on managing change while balancing regulatory requirements with business objectives. We develop programs that align with our operating model and the regulatory landscape without hindering business units. 

Business units must understand how compliance helps them make sound decisions and achieve their objectives. This requires compliance to be part of the decision-making process, helping the institution move forward.

At Beneficial State Bank, I emphasize the three lines of defense and clear organizational accountability for compliance. Everyone must understand their roles and responsibilities. When all three lines work effectively together, they help reduce compliance violations and potential legal risks.

Balancing AI Innovation with Compliance Risk

The biggest challenge today is the pace of regulatory and technological change. Laws, regulations, regulatory expectations and enforcement priorities are shifting, particularly under the new administration. These changes are more significant than in previous transitions, creating considerable uncertainty for compliance leaders.

Although executive orders are not necessarily laws, they influence how regulators evaluate an institution's performance. We must continually prepare our compliance and risk management programs around the evolving regulatory landscape while addressing the growing impact of technologies like AI on daily operations.

AI is transforming compliance, and organizations are racing to incorporate it into programs.  While AI offers opportunities to improve compliance operations, it also introduces risks that institutions must understand and manage. AI can improve the efficiency of Bank Secrecy Act and Anti-Money Laundering programs, from evaluation to execution. At the same time, perpetrators use technology to evade controls and facilitate illegal activities. 

The challenge is adopting AI responsibly. Employees must be properly trained to understand that AI should support, not independently make, decisions. 

Advice for Emerging Compliance Professionals

Compliance professionals must understand emerging technologies and their impact on compliance and risk management. Beyond evaluating controls and ensuring regulatory adherence, they must develop technological expertise alongside their knowledge of laws and regulations.

The other essential factor is partnership. We cannot succeed without working effectively with others and understanding the bank's business, including the roles and responsibilities of its business units. Professionals must understand how their bank operates, including the responsibilities of its business units, and work with these teams to ensure compliance is considered when decisions are made.

When compliance becomes involved only after a decision has been made, it can become a barrier to good ideas emerging and being implemented. Success ultimately depends understanding and using technology appropriately while building effective partnerships with the business units and support functions across the organization.