Regulatory Compliance
Regulatory compliance means adhering to the laws, regulations, guidelines and specifications relevant to a particular industry, including requirements set out by financial authorities relating to anti-money laundering, counter-terrorist financing, sanctions, and other financial crimes.
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Examples
The bank maintains a robust compliance program to ensure adherence to all relevant laws and regulations. This means that they utilise a risk-based approach where the level of due diligence is directly proportional to the customer’s risk profile. Therefore, individuals who are considered a high risk are vetted more thoroughly and are monitored more closely. The bank also creates Suspicious Activity Reports when suspicions of financial crime are observed in order to stay compliant with AML/CFT regulations.
FAQ
What are the key financial regulations that impact banks?
Major regulations include AML/CFT laws, KYC requirements, sanctions regimes, data protection rules, and financial reporting standards.
How do banks stay up-to-date with changing regulatory requirements?
Banks use regulatory intelligence tools, participate in industry bodies, and maintain dialogue with regulators to track changes.
What are the consequences of non-compliance?
Non-compliance can lead to fines, business restrictions, reputational damage, and personal liability for senior managers.
