Compliance

Investopedia describes the compliance department as a bank’s internal police force.

It is the unit that ensures that a financial institution complies with applicable laws, regulations and rules, and it plays an essential role in helping to preserve the integrity and reputation of the bank. Financial institutions operate in different ways, but they usually have one thing in common, which is a compliance department.

Responsibilities

The compliance department’s common tasks include monitoring the bank’s activities and controls and identifying and analyzing risk areas. This may include but might not be limited to assessing and testing the adequacy of the bank’s policies and equipment, such as security and risk assessment tools.

The compliance team may also design and implement solutions to address any identified risks, develop compliance programs for new regulations, and oversee employee training programs.

Responsibility for Clients

A compliance department’s focus goes beyond the bank, beyond its policies and beyond its employees. It bears the responsibility for ensuring that it’s clients act within the law and don’t make the bank a platform to carry out illegal financial activities, e.t.c. money laundering.

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