Compliance Management

Topics: Management, Audit, Policy Pages: 8 (1027 words) Published: April 25, 2014


Many industries are supervised by the authorities who perform the compliance activities. But for achieving good compliance it is necessary to judge the effectiveness & efficiency of those compliance activities. Multinational companies always focus that compliance record is in aligned to their management systems. Compliance management system provides rules related to the profession the industry is into & ensure that all the employees have adequate training about the law, rules & regulations. A complete audit log throughout the industry lifecycle has to be kept so that it can be accessed or retrieved as and when required. Based on the details of the compliance functions the company can manage the risk & can be risk free organization in the industry. Hence the report made consists of overview of the compliance management system & its plan for the top management in the bank & their responsibilities towards the system.

A compliance management system is the process by which the bank manages the consumer obedience process. The role of senior management & the board is to review the system on daily basis & identify the weakness & modify according to the need and make sure that there are minimal disruptions in the daily activities. The actions which board & senior management are responsible for are (Peek, T; Rode,M, 2009): Representing clearly the expectations about compliance.

Adopting policy statements
Appointing a compliance office
Resource allocation to the functions of compliance matching with each level of the bank’s operation. Conducting compliance audits periodically
Ask the compliance officer to send the report to the board
For effective compliance in the bank there should be various personnel associated like the compliance officer along with a compliance committee from different departments so that all the areas of the bank can be observed properly. A compliance officer should have the knowledge of protection laws of the consumer & regulations that is applicable to the bank functions (EHS Insight, 2014). The responsibilities of compliance office are: Develop the policies & procedures

Train the management & the other staffs of the bank about the laws & regulations of the consumer. Review the policies & procedures of the bank
Evaluate the rising compliance issues
Audit & send the compliance report to the board
Ensure corrective actions are taken
There is various compliance risk associated with the bank like material financial loss, risks related to legal sanctions, outsourcing brings external risks, risks related to the data and customer privacy, staff turnover etc. So every year banks must spend their time to mitigate these risks. Complexity in the business, changes in regulatory to risks in the governance and compliance is driving the banks to implement structured compliance management system. The key steps to implement the system are: Designing of the compliance management system.

1. This step involves policy & procedure setting for the bank. It is the framework of bank’s procedures & reference source for training the bank’s staff. The policies & the procedures should include instructions, directions for routing, retention, sample forms required for various bank operations, information about the transactions. Ensure that all the staffs are following the compliance system. 2. To ensure all stake holders like the director, senior management, customers, suppliers, shareholders, third parties are to made aware of the compliance system. All the employees of the bank must be trained about the various consumer protection law & regulation which are required for their job like Expedited Funds Availability Act or Bank Secrecy Act etc. Implementation of the compliance management system.

1. The board of directors should hire a compliance officer to...

Bibliography: EHS Insight. (2014). Continuous Compliance. Retrieved February 17, 2014, from
FDIC. (2012). Compliance Management System. Retrieved February 17, 2014, from
Peek, T; Rode,M. (2009, December 17). The Changing World of Compliance. Retrieved February 17, 2014, from
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