5. Compliance Management 5.1. Preamble Compliance risk is the risk of legal or regulatory sanctions, material financial loss, or loss to reputation a bank may suffer as a result of its failure to comply with laws, regulations, rules, related self-regulatory organization standards, and codes of conduct applicable to its banking activities. Compliance laws, rules, and standards typically include specific areas such as the prevention of money laundering and terrorist financing and may extend to tax laws that are relevant to the structuring of banking products or customer advice. Bank of Abyssinia S.C (BoA) as a Bank is committed towards best practices for its clients and stakeholders.
According to McCulley (2009), financing has got creative through the rise of securitization vehicles which has got momentum just before the financial crisis. Now the term represents a broader range of entities and activities. Moreover, ‘market-based financing’ instead of ‘shadow banking’ is preferred by some authorities and market participants. The term ‘shadow banking’ is sometimes deemed as too pejorative to characterize such an important and extensive part of the financial system despite the risks and lack of transparency involved in its activities (FSB, 2013). Traditionally, credit intermediation between savers and borrowers is executed in a single institution, a bank, which collects deposits and provides loans.
By decentralizing its operations into numerous subsidiaries, Enron was able to hide huge liabilities and derivative losses of their financial statements. However as these started to accumulate, creditors and investors demanded their money back but Enron was unable to meet their requirements with a negative cash flow, thus going bankrupt. Moreover, Enron’s finances were an impenetrable maze of carefully crafted imaginary transactions between the subsidiaries and itself, which masked its true financial state and therefore could not seek help when needed. The importance of internal controls in a business’ corporate culture is established through the beliefs and values of upper management. Enron focused on maintaining the appearance of value rather than creating it, thus fostering a competitive and risk-tasking environment that promoted the use of unethical accounting practises.
There are several examples I can chose from but the example I want to tackle will be the current one and would make this knowledge I have acquired about myself relevant. Some of the projects that highlighted these challenges where:- • The introduction, development and implementation of a Bank’s Country Disaster Recovery Plan. • Renegotiating the Bank’s business contracts to make them not only cost effective but also have effective business supportive structures. • Developing an online Health and Safety reporting and monitoring system. Not only did I have train our Staff, but I also had solicit for budgetary support from the Bank executive.
Answer 1) Strategically, what must Pan-Europa do to keep from becoming the victim of a hostile takeover? Considering the current financially bearish trend in Pan Europa, the entity needs to work on multiple yet chain corporate activities to avoid hostile takeover. Below are some strategies, which can be used by the company: i) To begin with, the company must channelize its investment in those projects that will assist the growth in the revenue figures and net income. It is also important for the company not take any additional debt and accept projects within their capital budget as the banks have already signaled red warning for unsustainable debt-equity position of the company. Analyzing the past performance of the company, we found that
For instance, the UN and Microsoft are partnering and collaborating to design blockchain technology for persons with no physical or electronic identity record. This is an example of how technology enablement can solve other business problems or optimize processes; moreover, by applying blockchain technology to identity systems, this could be a real-world application in a high-risk business area of anti-money laundering, know your customer or KYC where expenses are numerous for banks and the investigation expenditures for regulation and misinformation are also
Equally important, there is no industry to replace them as the key performer in creating our economies multiplier effect. Moreover, I would frame them as an industry that measures their success by ROA and ROE, metrics that is influenced by their ability to buy deposits and sell loans. I could give full SWOT analysis of the banking industry; however I would run out of room. Banks utmost strength is that bank lending has been a significant driver of GDP growth and employment. They are a conduit for social and economic policy.
Every Royal Bank customer has a relationship with the bank, but the nature and definition of the relationship vary according to the needs and requirements of the customer. As an example, some customers have no interest in being recognized by bank personnel when they contact the institution—for these customers low price or speed of service are the dominant properties of the relationship. For other customers, highly personalized interactions are the most important aspect of their relationship with the bank. The critical challenge for Royal Bank is to recognize that it must act in accordance with the wishes of its customers while still trying to achieve its own strategic objectives. If customers do not emphatically make known their expectations of the organization, the bank attempts to predict what the customers’ expectations are based upon prior observed behavior.
Your credit card information can get stolen by not being careful online. As to there being reasons why you shouldn’t use your credit card, there are reasons as to why you can or should. Logical reasons to use your credit card is for monthly bills such as cable or, cell phone bills. This helps you stay on track with your bills and be able to budget. Along with bills, you can pay for your rent in case you are short for any reason or behind in it, you can use this to help you and it can help you build your credit.
If you operate a small business, online banking offers advantages like accessing funds 24 hours a day or saving time by making fewer trips to the bank. At the same time, online banking presents potential disadvantages. Security • While banks typically offer secure web pages to conduct your business transactions, this doesn’t guarantee complete safety. All websites, even secure ones, may be susceptible to Internet criminals who try to hack into your account and gain access to your business’s private financial information. Site Disruption • A technical glitch could cause the bank’s website to go offline for a period of time, possibly resulting in problems for you and your business.