Due to the increasing sophistication of financial products, cross-border transactions and the financial crises of recent years, the banking and financial world is subject to ever-growing regulatory complexity.
Compliance is the duty of a bank to comply with the relevant regulations and to mitigate the risk of breaching any rules. Consequently, each staff member is responsible for ensuring the conformity with all internal policies and guidelines, in compliance with external laws and regulations.
A compliance department ensures that a company applies and adheres to all relevant rules, regulations and laws. Compliance can be seen as an in-house team in charge of verifying a company’s compliance with the applicable regulations. The tasks of a compliance department are performed independently, as part of a bank’s in-house control system, in particular in the context of transaction monitoring, trading monitoring, preventing money laundering, and ensuring that employees are up to date with new rules and regulations. In Switzerland, for example, the LBA or Anti-Money-Laundering Act stipulates that all transactions comply with a number of provisions, and all employees must regularly participate in courses on this subject. Any anomaly must be reported immediately to a compliance officer who will evaluate the issue and take the appropriate measures.