How can the supervisory board in financial institutions avoid scandals?
Germany's biggest bank has "serious" and "systemic"
failings in its controls against money laundering, terrorist financing,
and sanctions. These are some of the findings by the UK's financial watchdog
FCA, which had put the lender in supervisory "extraordinary measures" category.
Amongst the weaknesses at the bank; are missing documents, lack of transaction
monitoring and placing inappropriate staff pressures to take on certain
individual clients.
The German lender bank will have to
more than just struggle to extract itself from the regulatory grip and
implement controls and monitoring platform that probably already has a
price tag of billions of dollars.
From KYC/AML to terrorist financing and sanctions failings
The UK watchdog agency, called the Financial Conduct Authority (FCA),
has now ordered a separate independent review; because the overall conclusion
was that Deutsche Bank UK had serious AML (anti-money laundering), terrorist
financing and sanctions failings which were both severe and systemic in
nature.
Since the FCA wording is so grave, it would seem that effective senior
management engagement and leadership on financial crime probably had been
lacking in the organisation for a considerable period. Deutsche Bank will
have to reform its anti-financial crime program fundamentally. It must
be committed to engaging experts with knowledge of financial compliance
roadmaps and frameworks in fixing the KYC/AML and other fraud and forensic
problems.
Embark on a GRC journey to overhaul governance and compliance procedures
Already in 2014, the FCA had put Deutsche Bank's London office under enhanced
supervision owing to concern about the bank's governance and controls.
The oversight body was probably not satisfied with the GRC implementations
like remedial work, monitoring, and control. The bank must now embark
on a GRC journey, with the primary objective to perform a broad restructuring
and overhaul of its governance and compliance procedures.
The Bank has reengineered it's know-your-client (KYC) mechanisms and has
vetted the procedures when taking on new clients by suspending new customers
from 109 countries, defined as high risk, compared with 30 countries it
had earlier classified as too risky.
Certified solution to reduce the compliance burden
Last month The Financial Conduct Authority (FCA) fined Deutsche Bank $340
million for IBOR misconduct. The fine was the largest because Deutsche
Bank misled the regulator, hampered the investigation, and took too long
to produce vital documents, but above all moved far too slowly to fix
compatible systems and controls, according to the oversight authority.
The Copenhagen Compliance® Senior Managers Regime (SMR) & Certification
Regime (CR) seminars and workshop provides a certified solution to reduce
the compliance burden by ensuring that the right values, behavioural expectations,
& training on governance, risk management, and compliance(GRC) issues
are carried out across the organisation. http://www.copenhagencompliance.com/Senior-Manager-Regime-Brochure.pdf
Source; https://www.fca.org.uk/news/deutsche-bank-fined-by-fca-for-libor-and-euribor-failings
