Analysis of Problematic Issues in Building an Effective Bank Compliance System

Abstract

In the context of the globalization of the banking market and increased risks, there arises a need for a reliable system to ensure financial security and stability of a bank as well as compliance with all domestic and international standards, norms, and rules. These tasks can be solved by a compliance system. In the article, a morphological analysis of this concept is carried out, and the author’s own vision of the interpretation of this concept is presented. The proposed bank compliance system is based on the main financial methods (organization, analysis, planning, and control) and the principles of compliance developed by the Basel Committee. The organization of compliance can be provided at 2 levels: at the level of a banking institution and at the level of the banking system as a whole. A bank can create an independent compliance department or include the function of compliance control in the responsibilities of the legal department. At the level of the national banking system, compliance control is exercised by the National Bank of Ukraine. Compliance risks that are subject to analysis and planning within the framework of a compliance system include legal, reputational, operational, informational, and money laundering risk. Compliance control is aimed at ensuring conformity of actions of a bank’s management with domestic regulations.

Keywords

• risk management
• compliance
• risk management in banking
• financial stability of a bank